Almost two thirds (63%) of prospective first-time buyers are unaware of the cut-off date for the Help to Buy ISA, specialist bank Aldermore has found.
When given more information about deadline, which is 30 November this year, three quarters (75%) thought it should be made into a permanent scheme.
Ewan Edwards, head of savings, Aldermore, said: “Buying that first property can seem like a pipedream for many people and the Help to Buy ISA is an innovative product launched by the government to get them one step closer.
“It’s worrying that a large proportion of prospective first-time buyers are still unsure of what it is, how it works or the fact that the clock is ticking to open one.
“They could literally be missing out on thousands of pounds worth of government funding towards their first home.”
Launched over three years ago, Help to Buy: ISAs offer first-time buyers the opportunity to save up to £200 a month with the government topping up their contributions by 25%, up to a maximum of £3,000.
However, Aldermore’s research shows that confusion is rife. Even amongst those who had heard of the Help to Buy ISA, many are still unsure how it works. Over four fifths (83%) don’t know what the minimum government bonus is, while 80% don’t know what the maximum is.
Despite the confusion, almost four fifths (78%) of first-time buyers think the introduction of a bespoke savings product to help them save towards their first property is a good idea.
Three in five (61%) prospective first-time buyers who don’t currently save into a Help to Buy ISA said they would be more likely to save into one if they understood it better.
And encouragingly, after being given an explanation of the product and its benefits, over three quarters (78%) of prospective first-time buyers said they would use one to save for their first property.
There is also a lack of understanding of how the Help to Buy ISA works amongst parents.
Almost nine in 10 (89%) of parents of first-time buyers are unsure what the minimum government bonus is, while a similar proportion (93%) are unsure what the maximum bonus is.
When they were given an explanation, the vast majority (86%) said they would encourage their child to save into a Help to Buy ISA.
Edwards added: “Lack of understanding is a massive barrier but reassuringly, when explained exactly how the Help to Buy ISA works, a high number of first-time buyers would consider it, with the bonus incentive being the main part of its appeal.
“With only six months to go, people who are thinking about buying their first property in the next five or even ten years should consider opening a Help to Buy ISA before the November deadline so they don’t lose out on the 25% government bonus.
“Contributions can be made until November 2029, and the cut-off date to claim the bonus is 1st December 2030.”