• Almost four out of five 'would be' first time buyers (79%) think Help to Buy ISAs are a good idea, but nearly half (45%) do not plan to take the Government up on their offer of a free cash bonus.

  • Reasons for this include: 32% have already paid into their cash ISA this year; 29% are put off by the plethora of terms and conditions; and 13% do not trust the Government to pay the bonus.

  • Of those that plan to open an account 50% concede the bonus is better than any interest rate available; 45% think it's a generous offer; and 22% feel more secure paying into a Government-backed scheme.

  • Understanding is cloudy, as one in five (19%) think you can pay into one of these accounts alongside a cash ISA and a further 20% believe you can save the full ISA allowance. Just 15% are aware of the 200 a month limit.

  • Ahead of their launch on 1st December, 29% believe the Government should agree interest rates with banks and building societies and 25% feel Help to Buy ISAs should have fixed interest rates for four years.

On the 1st December 2015, banks and building societies will reveal the interest rates they'll pay on their new Help to Buy ISAs; these are part of a Government scheme to help people onto the property ladder.

A new study1, released today by financial comparison website money.co.uk reveals that almost half of first time buyers (45%) claim they will not open one of these accounts - despite a potential bonus of up to 6,000 per couple.

The research, which was carried out amongst 1,000 consumers who plan to buy their first property in the next five years, shows that one of the biggest barriers to entry is that savers cannot pay into a Help to Buy ISA and a standard cash ISA in the same tax year with the majority of major providers2.

Almost a third (32%) claim they've already invested in a cash ISA this year and say this is the reason they won't open a Help to Buy account. Equally, 29% are put off by the terms and conditions which include strong stipulations around how the money is withdrawn and spent.

Other reasons for not getting a Help to Buy ISA include: 28% want to save a larger amount of money in a cash or investment ISA; 25% feel it takes too long to earn the bonus; and 26% do not want to be tied into a Government scheme.

A further one in five (19%) feel the Government aren't pledging enough to help and 13% don't trust the Government to pay the bonus. More than one in ten (11%) have concerns that the value of the property you can buy with the money saved in a Help to Buy ISA does not increase year on year - this could be a huge problem with house prices currently in 'acceleration' mode.

55% of those surveyed do plan to take out a Help to Buy ISA and 50% rightly believe the 25% bonus is better than the interest you could earn on a normal cash ISA.

To gauge understanding, we tested our panel of would-be first time buyers' knowledge of Help to Buy ISAs before we divulged full details of these products. While just over half (51%) had heard of them, 69% of these were completely unaware that you can't pay into one of these accounts alongside a standard cash ISA.

One in five believe you can save the full cash ISA allowance in a Help to Buy ISA. This isn't the case, as the total amount you can pay into one of these new accounts is 3,400 in the first year - 11,480 less than the standard ISA allowance. Thereafter savers can pay in just 2,400 a year. Just 15% are aware of the real limit of the Help to Buy account.

Our research also revealed some scepticism around the Government's intention to use Help to Buy ISAs to help alleviate the housing problem, and 13% only see this as a way for banks to cross-sell products to first time buyers.

When it comes to the interest rates paid on these accounts, 29% believe the Government should be working with banks and building societies to decide these and 25% think the rates should be fixed for four years.

Help to Buy ISA fast facts

  • First time buyers, classed as those who have never owned a property before, can save up to 200 a month

  • An additional 1,000 can be paid in upon account opening

  • The Government will pay a 25% tax free bonus on up to 12,000, giving savers a boost of up to 3,000

  • It would take four years and seven months to secure the full bonus

  • The government will pay your bonus whenever you take the money out, as long as you've paid in at least 1,600

  • The accounts can be opened between 1st Dec 2015 and Dec 2019 but savers can hold the account for as long as they want to

  • The money must be used for a deposit for a house, but you can take it out and forfeit the bonus if you decide not to buy

  • You can use the money to buy a residential property worth up to 250,000 (450,000 in London)

  • You can choose any mortgage and any property you like; you're not tied to other Help to Buy schemes

  • You can't pay into a Help to Buy ISA and a standard cash ISA savings account in the same tax year2

  • The total amount consumers can save in the Help to buy ISA in year one is 3,400 - 11,840 less than the ISA limit

  • Savers will be able to transfer money in a Help to Buy ISA to more competitive deals with other providers

  • The 3,000 maximum bonus is per first time buyer, so couples could get 6,000 towards their first home

  • Barclays, Lloyds Banking Group, Nationwide, NatWest, Santander and Virgin Money will be offering Help to Buy ISAs

  • You need to be over 16 to open an account

Hannah Maundrell, Editor in Chief of money.co.uk, comments:

"Help to Buy ISAs aren't the silver bullet that will shoot wannabe first-time buyers onto the property ladder, but the free cash will certainly give them a step up.

"Anyone that's even contemplating buying a property should think about getting one, not least because the interest rates are likely to be competitive. Even if you're buying in the very near future it's likely to be worth opening an account as it will give your deposit a last minute boost.

"The biggest health warning for first-time buyers is that banks and building societies will inevitably use Help to Buy ISAs as an opportunity to cross-sell mortgages and other financial products.

"You need to be aware of this so you don't play into their hands - when you come to buy ,it's really worth comparing all the deals out there or it could cost you thousands of pounds. A mortgage is a long and expensive commitment and while your existing bank might seem like the easy option, it doesn't mean they're the best one; in all likelihood they won't be."

Notes to Editors:
1. A survey of 1,000 consumers who have never owned a property but plan to purchase one in the next five years was carried out by OnePoll on behalf of money.co.uk from 3rd November - 9th November, 2015.
2. Nationwide Building Society, Post Office, AA, Bank of Ireland and Newcastle Building Society allow savers to invest in more than one Cash ISA product in the same tax year.