Lifetime ISAs guide
Comments
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Thanks for pointing that out Peter. I need to open a LISA soon as my 40th is rapidly approaching and have decided on Nutmeg for a number of reasons. The next step was decide how to fund it. I'd prefer to drip feed to counter any fluctuations in the market and was thinking of £700 up front and £300 a month thereafter, but it looks like that won't be possible which is very frustrating.
I get the impression that with the final regulations being published so late, all three providers launching today have rushed to get enough infrastructure in place to manage the initial demand for sign-ups, and will flesh out their systems over time. Another example ... the only way to fund the Nutmeg account right now is via a Debit Card payment which will take up to 3 days to appear (no bank transfer ability for the LISA, yet).0 -
You can transfer to another provider. Providers do not have to accept transfers. That's about it. There are no transfers "between cash to stocks and shares", since LISAs are not restricted to one or the other (beyond what providers allow you to hold).ben_harding10 wrote: »1) Transfers- what are the rules (are there any on transferring my LISA cash park from one provider to another, and in-between cash to stocks and shares or vice versa?
The bonus is based on the amount of cash subscribed.2) If I invest £4000 into the stocks and shares LISA, and the funds lose money, where do the government take the percentage and how much would I get from them? i.e £4000 invested, lowers to £3750 before end of tax year, govt. either pays 25% on original pay-in but delays payment to the end of tax year, or gives 25% on max £4000. Should be the first option if you don't get 25% on additional money earned in stocks but need clarification.
Your guess is as good as anyone elses, but I imagine there will be interest on LISAs where you cannot invest in S&S, and I imagine that interest will be beaten by non-ISA accounts.3) Will cash LISAs have interest from the provider attached akin to other ISAs or is the govt. payout the only addition you get? i.e Skipton BS could give 1% on £4000 (could even only pay 1% on up to figures like £2000).0 -
If this is part of your retirement planning and you are putting in £4000 a year for the next ten to eleven years and then being left until you're over 60 to grow further, that is a natural "drip feed" and will encompass plenty of ups and downs as your ongoing purchases buy assets at all sorts of prices over the next 120 months.Thanks for pointing that out Peter. I need to open a LISA soon as my 40th is rapidly approaching and have decided on Nutmeg for a number of reasons. The next step was decide how to fund it. I'd prefer to drip feed to counter any fluctuations in the market and was thinking of £700 up front and £300 a month thereafter, but it looks like that won't be possible which is very frustrating.
When you are 120 months down the line and you look back, you are really not going to think "oh my god look how much my portfolio suffered when I paid in £1200 in August 2017 instead of £300 in each of May, June July and August"
So, it doesn't have to be "so frustrating". If you're bothered about it, you could invest the £300pm in their ISA or general unwrapped investment account instead over the next few months and move the resulting investment proceeds over later. Even if you use the non-ISA, non-LISA, unwrapped fully taxable account, it's not like you're going to end up paying capital gains tax or dividend tax on the profits you get on £1000 invested for a few months.0 -
Keep your money in the account paying the best rate of interest up to June. That may or may not be the HTB ISA.Good morning!
A quick question with regards to the next course of action for me. I think I will be likely buying a property next year (probably towards the end). I currently have £2k in my HTB and I would like to maximise the opportunity with the LISA.
Should I continue to pay £200k per month into my HTB until June and open LISA then transfer or should I wait until June and open a LISA then transfer the HTB into the LISA?
Thanks !0 -
25% is deducted on anything you withdraw before 60 for a non-"life event". Investment performance within the LISA is irrelevant to this.The example calculation assumes no interest. So £100 invested, gets increased to £125 with the bonus, but I only get £93.75 if I withdraw before I'm 60 due to a £31.25 penalty.
In reality, I would be putting into funds with reasonable growth expectation. At some point, that £125 may now be worth £250 and an emergency comes up where I need to withdraw some or all of it.
Is it the same £31.25 penalty as above - meaning I get back £218.75?
Or is the 25% penalty on the new value, meaning £62.50 penalty and I only get back £187.50?
Putting this another way, if I've 100% growth, do I get back 75% of the growth or 50%?
Also, if my investment depreciates, how do these calculations work?
Income cannot be "paid away", so it will just be another form of growth within your LISA.Also, I presume there's no point investing in income funds. Any income from funds would need to be reinvested or get penalised too?
If you use their ready made ISAs, then you'd end up paying those extortionate fees. If you use a cheap multi-asset fund, your total fees could be as low as 0.67%.Hargreaves Lansdown: 0.45% account charges + (1.36% to 1.46%) OCF for their Ready Made ISAs. So I'm looking at 1.81% to 1.91% total fees?
Yes, or if you use their fixed portfolios, about 0.65%. There is no evidence their managed portfolio will perform better than the equivalent fixed one over the next X years.Nutmeg: 0.75% for their managed portfolio + about 0.19% manager charges. So I'm looking at 0.94% total fees?
I don't know, but you'd be mad to pay even this much.Share Centre: 2% to 2.21%. Are there any other fees?
Not necessarily. HL and Nutmeg are tied when it comes to the cheaper options.I realise you can't predict which funds will perform better, but on the face of it, Nutmeg fees are about half the others. Given I don't want to pick investments myself, are Nutmeg the obvious choice?
Remember that Nutmeg is a loss making venture that has had to have several injections of capital to keep going, whereas HL is a profitable and established company, so that could factor into your decision. I'm not in a rush to open a LISA anywhere that currently offers one.0 -
1st post, Hello everyone!
Has anyone noticed in the Nutmeg T&C's this line?
By clicking 'Create account' below, you agree that the above information is correct to the best of your knowledge and belief, and you also declare that:
.....
"You have not made current year payments, or transfers from a Help to Buy: ISA, and will not make current year payments, or transfers from a Help to Buy: ISA, to another Lifetime ISA in the same tax year that you subscribe to this Lifetime ISA"
.....
I read that as saying you can not participate in a HTB ISA and will not participate this year with the aim of transferring it to another LISA this year? (something I think most of us are talking about doing?)
Can anyone elaborate on this, I surely must be reading this wrong?
This statement combined with the fact that Nutmeg are by far the best choice in terms of low fees and other generous T&C's (No leaving fee?!?!) makes me worried something odd like this hides in the fine print that will work against those who have a HTB ISA and are opening this to get the clock ticking.0 -
I've just spoken to a customer services representative at The Share Centre (one of the companies launching the stocks and shares LISA). They told me that I can't open a LISA with £1 in to start the year clock ticking, and pay into my existing H2B ISA in the same tax year.
This contradicts the article 'Should you switch your Help to Buy ISA into a Lifetime ISA?' on the website. Please could someone clarify?Has anyone noticed in the Nutmeg T&C's this line?
By clicking 'Create account' below, you agree that the above information is correct to the best of your knowledge and belief, and you also declare that:
.....
"You have not made current year payments, or transfers from a Help to Buy: ISA, and will not make current year payments, or transfers from a Help to Buy: ISA, to another Lifetime ISA in the same tax year that you subscribe to this Lifetime ISA"
Both the Share Centre and Nutmeg are wrong. You can subscribe to a HTB ISA and LISA in the same tax year.0 -
Both the Share Centre and Nutmeg are wrong. You can subscribe to a HTB ISA and LISA in the same tax year.
Yes, and when I spoke to Nutmeg on the phone this morning, I specifically went through my scenario ... I will continue paying into my HTB ISA and transfer to my Nutmeg LISA when they make that facility available. The support person agreed that this would be OK.0 -
1st post, Hello everyone!
Has anyone noticed in the Nutmeg T&C's this line?
By clicking 'Create account' below, you agree that the above information is correct to the best of your knowledge and belief, and you also declare that:
.....
"You have not made current year payments, or transfers from a Help to Buy: ISA, and will not make current year payments, or transfers from a Help to Buy: ISA, to another Lifetime ISA in the same tax year that you subscribe to this Lifetime ISA"
.....
I read that as saying you can not participate in a HTB ISA and will not participate this year with the aim of transferring it to another LISA this year? (something I think most of us are talking about doing?)
Can anyone elaborate on this, I surely must be reading this wrong?
This statement combined with the fact that Nutmeg are by far the best choice in terms of low fees and other generous T&C's (No leaving fee?!?!) makes me worried something odd like this hides in the fine print that will work against those who have a HTB ISA and are opening this to get the clock ticking.
You are reading it wrong.
You can't make current year payments or transfers from a H2B ISA to another LISA in the same year you subscribe to the Nutmeg LISA (unless you later transfer the Nutmeg LISA to another LISA).
It may have been helpful if they'd used brackets rathr than commas:
"You have not made current year payments, or transfers from a Help to Buy: ISA (and will not make current year payments, or transfers from a Help to Buy: ISA) to another Lifetime ISA in the same tax year that you subscribe to this Lifetime ISA"0 -
You are reading it wrong.
You can't make current year payments or transfers from a H2B ISA to another LISA in the same year you subscribe to the Nutmeg LISA (unless you later transfer the Nutmeg LISA to another LISA).
It may have been helpful if they'd used brackets rathr than commas:
"You have not made current year payments, or transfers from a Help to Buy: ISA (and will not make current year payments, or transfers from a Help to Buy: ISA) to another Lifetime ISA in the same tax year that you subscribe to this Lifetime ISA"
This makes much more sense. THANKS!
:doh:0
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