Lifetime ISA

24

Comments

  • 6022tivo
    6022tivo Posts: 781 Forumite
    Name Dropper First Anniversary Combo Breaker First Post
    edited 4 March 2018 at 9:43PM
    So, you get 25% government bonus at year one, then nothing for the rest of the time it is in the account. So over year after year, that 25% just dilutes?
  • Alexland
    Alexland Posts: 9,653 Forumite
    First Anniversary Photogenic Name Dropper First Post
    6022tivo wrote: »
    So, you get 25% government bonus at year one, then nothing for the rest of the time it is in the account. So over year after year, that 25% does not increase?

    Yup you only get a 25% bonus on a contribution once. For the rest of the time you are relying on the Cash ISA compound interest or S&S LISA investment return.

    So if you add £4k in year 1 you get £1k, add £4k in year 2 you get another £1k, etc.
  • 6022tivo
    6022tivo Posts: 781 Forumite
    Name Dropper First Anniversary Combo Breaker First Post
    The more I think about it, it a bit pants isn't it?
    0.1% from Skipton is it??

    The HTB was probably better as you get the interest every year, then 25% when you buy the house?
    I shouldn't have transferred..
  • Alexland
    Alexland Posts: 9,653 Forumite
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    edited 4 March 2018 at 10:24PM
    6022tivo wrote: »
    The more I think about it, it a bit pants isn't it?
    0.1% from Skipton is it??

    The HTB was probably better as you get the interest every year, then 25% when you buy the house?
    I shouldn't have transferred..

    Well the main advantages of the LISA are that you can add a further £1600 per year (£4000 versus £2400) for a bigger 25% bonus and also that you can buy a house up to £450k nationwide. However if these are not of use to you then you might have been better staying with a HTB ISA.

    ps the interest on Skipton is 0.75%

    Alex,
  • maddoglewis
    maddoglewis Posts: 50 Forumite
    First Post First Anniversary Combo Breaker
    I'm transferring my HTB ISA into a LISA to take advantage of the extra bonus available for the 17/18 tax year. What I don't understand is why this years interest accrued in my HTB ISA counts towards the £4000 maximum LISA contribution. So, if I have paid in £2400 this year and received £100 interest, I can only pay £1500 into my LISA before the end of this tax year, is that right?
  • 6022tivo
    6022tivo Posts: 781 Forumite
    Name Dropper First Anniversary Combo Breaker First Post
    Nope. I believe you can transfer in everything Inc interest from your htb, and also add 4k before April and get the 25% on the lot.
  • maddoglewis
    maddoglewis Posts: 50 Forumite
    First Post First Anniversary Combo Breaker
    6022tivo wrote: »
    Nope. I believe you can transfer in everything Inc interest from your htb, and also add 4k before April and get the 25% on the lot.

    Not if you've already contributed into the HTB ISA this tax year though.
  • BenZaff
    BenZaff Posts: 1 Newbie
    If I open a cash LISA today and deposit £4000, will I get £1000 government contribution at end of March 2019 if I buy a house then? And if I deposit another £4000 in a exactly a years time in March 2019 will I get a further £1k in April 2019 at beginning of new tax year, (I.e 1k for 2017-2018 and 1k for 18-19)? Or will I just get £1k in April 2019 and monthly payments on the new deposited balance of the 19-20 tax year?
  • eskbanker
    eskbanker Posts: 31,013 Forumite
    First Anniversary Name Dropper Photogenic First Post
    BenZaff wrote: »
    If I open a cash LISA today and deposit £4000, will I get £1000 government contribution at end of March 2019 if I buy a house then?
    No, if you pay in £4,000 before the end of the tax year on 5 April 2018, you'll receive the £1,000 bonus around the end of April 2018.
    BenZaff wrote: »
    And if I deposit another £4000 in a exactly a years time in March 2019 will I get a further £1k in April 2019 at beginning of new tax year, (I.e 1k for 2017-2018 and 1k for 18-19)? Or will I just get £1k in April 2019 and monthly payments on the new deposited balance of the 19-20 tax year?
    Sounds like you've probably misunderstood the timing of contributions and bonus payments - you can pay in up to £4K every tax year (not every 12 month period from opening) and will receive a 25% bonus about 4-8 weeks after you've done so. If you started one with £4K before 5 April 2018, you could pay in another £4K on 6 April 2018 and get a second bonus of £1K around the end of May 2018.
  • 6022tivo
    6022tivo Posts: 781 Forumite
    Name Dropper First Anniversary Combo Breaker First Post
    I think I now understand.

    So my Halifax HTB Isa I have been paying £200 a month in for the last 11 months sine April 2017 £2200.

    I have just transferred it to Skipton (total of about £5k) so does this mean I can pay only a further £1800 in before the end of this month?
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