Lifetime ISAs guide

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  • mm84
    mm84 Posts: 2 Newbie
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    Hi all,

    I have opened a Lifetime ISA account (cash) with HL, adding £300 to it, just to start the clock. How is the government calculating the bonus in 2017/2018, is it based on the amount available at the end of the tax year (5th April 2018)? Or are they calculating the bonus monthly, based on the amount invested in LISA?

    I would like to invest £3700 elsewhere until end of March 2018, and then top up LISA to £4000 and get £1000 bonus :) Would that work?

    The same question for 2018/2019, as the Gov has mentioned bonus will be paid monthly, I assume that the bonus will be calculated based on the amount invested, so if you want to have full £1000 bonus, you will have to have £4000 invested from April 2018 onwards (and get £83.33 bonus each month)?

    Thanks.
  • Ed-1
    Ed-1 Posts: 3,891 Forumite
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    mm84 wrote: »
    Hi all,

    I have opened a Lifetime ISA account (cash) with HL, adding £300 to it, just to start the clock. How is the government calculating the bonus in 2017/2018, is it based on the amount available at the end of the tax year (5th April 2018)? Or are they calculating the bonus monthly, based on the amount invested in LISA?

    I would like to invest £3700 elsewhere until end of March 2018, and then top up LISA to £4000 and get £1000 bonus :) Would that work?

    The same question for 2018/2019, as the Gov has mentioned bonus will be paid monthly, I assume that the bonus will be calculated based on the amount invested, so if you want to have full £1000 bonus, you will have to have £4000 invested from April 2018 onwards (and get £83.33 bonus each month)?

    Thanks.

    The bonus is paid on the amount contributed during the period before the bonus is paid. It's not interest so it doesn't matter when you pay it in as long as it's there before the next bonus is paid, otherwise the bonus will be paid the next time round etc.

    So whatever you contribute in the 2017/18 tax year will get a bonus in May 2018.

    The bonus periods will be monthly from 2018/19. So contribute £4,000 in the first month and you'll get the full bonus of £1,000 at the end of that month.
  • mm84
    mm84 Posts: 2 Newbie
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    Thanks a lot for the prompt and clear reply. Nice opportunity to earn interest and gov bonus in this tax year.
  • System
    System Posts: 178,093 Community Admin
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    masonic wrote: »
    Presumably your parents aren't putting down the whole mortgage deposit, so I can't see it being an issue. Even if they were buying jointly with you it wouldn't be a problem. All you need to do is make sure the proceeds from your HTB ISA or LISA are actually included in the funds used at completion and the property is in your name.


    Just to go back to this -- is there anyway to confirm this ? As I wouldn't want to scrimp & save + live off of baked beans & pasta for the year only to find out I couldn't use my hard earned LISA savings (and moreover, negate a bonus!) if I went with the Barclays Springboard and it couldn't also be used in conjunction with the LISA scheme ? Just want to get 100% certainty - who would be best to approach about this ; Barclays themselves, an independent mortgage broker, mortgage advice beareau etc. ? Thanks in advance!
  • masonic
    masonic Posts: 23,275 Forumite
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    NevvyC wrote: »
    Just to go back to this -- is there anyway to confirm this ? As I wouldn't want to scrimp & save + live off of baked beans & pasta for the year only to find out I couldn't use my hard earned LISA savings (and moreover, negate a bonus!) if I went with the Barclays Springboard and it couldn't also be used in conjunction with the LISA scheme ? Just want to get 100% certainty - who would be best to approach about this ; Barclays themselves, an independent mortgage broker, mortgage advice beareau etc. ? Thanks in advance!
    Your solicitor/conveyancer would be the one able to confirm. They are responsible for consolidating the funds used for the purchase. It is their actions that will determine whether the LISA money can be used.
  • LOLLABEE
    LOLLABEE Posts: 7 Forumite
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    Hi All,

    I am saving to buy my first house, so opened the Halifax HTB ISA on its opening date in Dec 2015.
    Have since saved the max (1200 first month, then 200 per month) to date.
    I have also been saving an additional amount into a (non-ISA) savings account as wanted to save more than 200 per month. By April 2018 This would roughly equate to £8,000 additional savings.

    I was hoping (like many others) that the LISA would be more simple, and a cash account affair. Due to the 'damp squibby-ness' of the LISA release, I have been hesitant to commit to a S&S LISA because all options mean a loss of money (transfer fees etc).

    From looking at previous posts and advice this page, I just want to check the following plan of action:
    • Wait to open a cash ISA, any will do so long as it doesn't charge to transfer money in. Open with minimum (June-ish 2017) and set the 12 months going.
    • March 2018, transfer in my HTB balance. By then it should be £6800 or so (including interest)
    • Also transfer £4000 from my other save to buy account into the LISA.
    • Get 25% Bonus on £10,800 (+2,700)
    • Then after April 6th transfer another £4,000 from my other savings account. And get the 25% bonus on:
    £10,800 + 2,700 + 4,000 = 17,500

    (I think this is only 25% on the latest 4,000 for the 2018/19 tax year, so add 1,000)
    • This would make £18,500 overall?
    I wouldn't be able to put any more in that year, but would have the max bonus as quick as possible- and able to start to buy a house when the 12 months lock in finished with a deposit of £18,500?


    Any recommendations are welcome on the above.
    Not in a massive rush to buy, but would like to make use of the bonus.


    Thanks
    :o:o:o
  • Ed-1
    Ed-1 Posts: 3,891 Forumite
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    edited 22 April 2017 at 9:14PM
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    LOLLABEE wrote: »
    Hi All,

    I am saving to buy my first house, so opened the Halifax HTB ISA on its opening date in Dec 2015.
    Have since saved the max (1200 first month, then 200 per month) to date.
    I have also been saving an additional amount into a (non-ISA) savings account as wanted to save more than 200 per month. By April 2018 This would roughly equate to £8,000 additional savings.

    I was hoping (like many others) that the LISA would be more simple, and a cash account affair. Due to the 'damp squibby-ness' of the LISA release, I have been hesitant to commit to a S&S LISA because all options mean a loss of money (transfer fees etc).

    From looking at previous posts and advice this page, I just want to check the following plan of action:
    • Wait to open a cash ISA, any will do so long as it doesn't charge to transfer money in. Open with minimum (June-ish 2017) and set the 12 months going.
    • March 2018, transfer in my HTB balance. By then it should be £6800 or so (including interest)
    • Also transfer £4000 from my other save to buy account into the LISA.
    • Get 25% Bonus on £10,800 (+2,700)
    • Then after April 6th transfer another £4,000 from my other savings account. And get the 25% bonus on:
    £10,800 + 2,700 + 4,000 = 17,500

    (I think this is only 25% on the latest 4,000 for the 2018/19 tax year, so add 1,000)
    • This would make £18,500 overall?
    I wouldn't be able to put any more in that year, but would have the max bonus as quick as possible- and able to start to buy a house when the 12 months lock in finished with a deposit of £18,500?


    Any recommendations are welcome on the above.
    Not in a massive rush to buy, but would like to make use of the bonus.


    Thanks
    :o:o:o




    Anything paid into the Help to Buy ISA after 5th April 2017 counts against the £4,000 LISA limit for 2017/18 when transferred across. So you can either transfer just previous year contributions from the Help to Buy ISA and pay in £4,000 extra money to the LISA and keep the Help to Buy ISA for its higher interest rate but you wouldn't ve anle to get the bonus on it.
  • snowqueen555
    snowqueen555 Posts: 1,521 Forumite
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    ISA's changing so fast.

    So if I open a LISA with HL (I already have a SS ISA with them and just plan to transfer 4k from one to another), can I keep contributing to my HSBC HTB ISA?
  • eskbanker
    eskbanker Posts: 31,034 Forumite
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    snowqueen555 wrote: »
    So if I open a LISA with HL (I already have a SS ISA with them and just plan to transfer 4k from one to another), can I keep contributing to my HSBC HTB ISA?
    Yes, but you can't get the 25% bonus on 2017/18 contributions to both your HTB and your LISA, see http://www.moneysavingexpert.com/savings/lifetime-ISAs#property6
  • snowqueen555
    snowqueen555 Posts: 1,521 Forumite
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    eskbanker wrote: »
    Yes, but you can't get the 25% bonus on 2017/18 contributions to both your HTB and your LISA, see http://www.moneysavingexpert.com/savings/lifetime-ISAs#property6

    Fine by me, I am just after the 2% interest rate on the HTB. I do wonder how they monitor that stuff though, like a few years down the line how do they calculate the HTB bonus?
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