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  • FIRST POST
    • peter_333
    • By peter_333 1st Nov 17, 3:49 PM
    • 47Posts
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    peter_333
    Nutmeg pulls plans to allow HTB ISA transfers to LISA
    • #1
    • 1st Nov 17, 3:49 PM
    Nutmeg pulls plans to allow HTB ISA transfers to LISA 1st Nov 17 at 3:49 PM
    I've just received an email from Nutmeg, stating that their previous plan to allow a HTB ISA to be transferred into a Nutmeg LISA, will not longer go ahead. This has thrown a MASSIVE spanner in the works for my LISA plans, and I'm incredibly, incredibly frustrated and angered by the announcement. I've just finished a fairly grumpy phone call with their customer service team who have said that there's nothing they can do about it.

    While I'm sure Nutmeg won't reverse the decision to abandon the HTB transfer facility, I thought it may be worth starting a thread to discuss how people plan to proceed, to overcome this new obstacle in their LISA plans.

    For reference, here is the communication I had from Nutmeg on 7 April:
    We are already working on building the functionality to transfer HTB ISAs in to the Nutmeg LISA and this will be one of the first additions that we make. I'm expecting this to be ready in the new few weeks, so I would say that it is certain that you will be able to transfer your HTB ISA to us well before 5th April 2018.
    That's fairly unequivocal! I opened my LISA with them based on the certainty that the transfer service would be available. It wasn't a possibility that it would be available, it was a certainty!

    Can others post any correspondence they had from Nutmeg regarding the HTB transfer being up and running before the end of the financial year? Might be useful in making a formal group complaint to a relevant regulatory body.
Page 1
    • eskbanker
    • By eskbanker 1st Nov 17, 7:41 PM
    • 5,906 Posts
    • 5,881 Thanks
    eskbanker
    • #2
    • 1st Nov 17, 7:41 PM
    • #2
    • 1st Nov 17, 7:41 PM
    This has thrown a MASSIVE spanner in the works for my LISA plans, and I'm incredibly, incredibly frustrated and angered by the announcement.
    Originally posted by peter_333
    A bit of an overreaction there to be honest - all you need to do is to transfer your LISA to one of the other S&S LISA providers and then you can transfer your HTB in, job done, or am I missing something significant here? If you really wanted, you could then transfer back again (after consolidating the HTB) if you were of the view that nothing other than Nutmeg suits your needs....

    Entirely up to you whether you want to devote a whole bunch of time and energy to trying to pursue Nutmeg for misleading promises but, as you recognise, they're not going to change their mind so what are you actually hoping to achieve as an outcome?
    • ricky989
    • By ricky989 1st Nov 17, 9:08 PM
    • 4 Posts
    • 1 Thanks
    ricky989
    • #3
    • 1st Nov 17, 9:08 PM
    • #3
    • 1st Nov 17, 9:08 PM
    I am also very disappointed with this decision.

    As far as I understand it if I withdraw my H2B ISA as cash and put in as much as I can into Nutmeg for the rest of this year (£3900 in my case - I have £100 in the LISA) and then the rest in the next tax year (approx £2800) I will be severely limited as to how much I can save at the end of next year due to using over half of my next years LISA allowance in April already!

    I think I will have to move this LISA to a new provider, transfer ALL of my H2B in (Allowance free for this tax year) and then either stick with the new LISA provider or move back to nutmeg next year etc.

    Argh!
    • Alexland
    • By Alexland 1st Nov 17, 10:32 PM
    • 787 Posts
    • 487 Thanks
    Alexland
    • #4
    • 1st Nov 17, 10:32 PM
    • #4
    • 1st Nov 17, 10:32 PM
    AJ Bell support HTB transfers in on their LISA and frankly offer better value for money on balances above £10k compared to Nutmeg. If you invest in something like Vanguard LifeStrategy 40/60/80 you will get similar performance. Just a pain to maintain the cash balance to pay the 0.25% account fee and £1.50 per trade.
    • ricky989
    • By ricky989 1st Nov 17, 10:50 PM
    • 4 Posts
    • 1 Thanks
    ricky989
    • #5
    • 1st Nov 17, 10:50 PM
    • #5
    • 1st Nov 17, 10:50 PM
    AJ Bell do not offer transfer in from an existing LISA so what options do we actually have, does anyone know?
    • peter_333
    • By peter_333 1st Nov 17, 11:37 PM
    • 47 Posts
    • 11 Thanks
    peter_333
    • #6
    • 1st Nov 17, 11:37 PM
    • #6
    • 1st Nov 17, 11:37 PM
    A bit of an overreaction there to be honest - all you need to do is to transfer your LISA to one of the other S&S LISA providers and then you can transfer your HTB in, job done, or am I missing something significant here? If you really wanted, you could then transfer back again (after consolidating the HTB) if you were of the view that nothing other than Nutmeg suits your needs....
    Originally posted by eskbanker
    Sure, a bit of an overreaction in the moment, but I'm still pretty annoyed by them. The hassle of researching alternative providers and transferring the LISA is not insignificant. Sure, it might only be an evening or two of faf, but right now, my life really could really do without that headache.

    Annoyed at myself too. A couple of different people warned me to avoid Nutmeg, one specifically saying that the company was a prime example of a start-up whose priority is slick marketing touting a fantastic product and platform that never lives up to their own hype. I'm really not convinced by their current cries of "We tried to get the HTB transfer up and running. We really did. Honest!"
    • peter_333
    • By peter_333 1st Nov 17, 11:49 PM
    • 47 Posts
    • 11 Thanks
    peter_333
    • #7
    • 1st Nov 17, 11:49 PM
    • #7
    • 1st Nov 17, 11:49 PM
    AJ Bell do not offer transfer in from an existing LISA so what options do we actually have, does anyone know?
    Originally posted by ricky989
    Here's my current assessment:

    Skipton seem to accept transfers from an existing LISA, and also currently allow transferring your HTB into the LISA.. However, MSE warns that "Skipton has a T&C which allows it to stop accepting transfers in." so the HTB transfer could disappear at any time.

    AJ Bell, as you say, don't seem to currently allow opening an account via transfer of an existing LISA from another provider.

    Hargreaves Lansdown seem to allow both transfer of an existing LISA and transfer of a HTB ISA. I am slightly put off by their £25 transfer or exit fees, but besides that, maybe they fit the bill.

    The Share Centre was never an option for me, based on their ridiculously high management fees.

    So it seems I either go with Skipton earning 0.5% interest and taking a risk that they pull the HTB transfer facility, or go with Hargreaves Lansdown.

    Any other options I've missed?
    Last edited by peter_333; 01-11-2017 at 11:50 PM. Reason: typo
    • Alexland
    • By Alexland 2nd Nov 17, 6:32 AM
    • 787 Posts
    • 487 Thanks
    Alexland
    • #8
    • 2nd Nov 17, 6:32 AM
    • #8
    • 2nd Nov 17, 6:32 AM
    You have the option of waiting a bit longer for AJ Bell to get LISA transfers online?
    • Plus
    • By Plus 2nd Nov 17, 9:20 AM
    • 252 Posts
    • 183 Thanks
    Plus
    • #9
    • 2nd Nov 17, 9:20 AM
    • #9
    • 2nd Nov 17, 9:20 AM
    I would have thought you can just roundtrip old money via Skipton:

    1. Open Skipton LISA, transfer 2015/16 and 2016/17 money from HTB ISA
    ...wait for the transfer to arrive...
    2. Transfer whole Skipton LISA to whoever is accepting transfers

    This doesn't help with current year's HTB contributions you want to transfer. There you have two choices:

    a. Transfer current HTB and LISA contributions from Nutmeg to Skipton before step 2 in the above

    b. or, if you're not going to hit the £20K ISA limit, just pay up to 4K into your LISA and ignore this year's HTB. Some HTB ISAs are getting a good rate, so you might wish to keep money there as just another cash ISA if you can even though you're not going to claim the bonus on it. Or withdraw it and pay cash into the LISA.

    If Skipton stop transfers into their LISA then we have a problem, however...
    Last edited by Plus; 02-11-2017 at 9:22 AM. Reason: Tpyo
    • Plus
    • By Plus 2nd Nov 17, 9:36 AM
    • 252 Posts
    • 183 Thanks
    Plus
    AJ Bell sent an email yesterday saying their HTB->LISA transfers are online:
    https://www.youinvest.co.uk/lifetime-isa/help-to-buy-to-lifetime-isa
    • Chapuys
    • By Chapuys 2nd Nov 17, 10:53 AM
    • 145 Posts
    • 115 Thanks
    Chapuys
    I plan to complain officially but doubt it will do anything. I am already eyeing up Skipton for December 9th (after my yearly ISA interest is paid out on my HTB ISA). I'm also wondering whether I should keep my £6k HTB ISA as just a regular saver and forgo the 25% bonus as I still get 3.5% on my HTB ISA.

    Edit: Speaking to Skipton just now, they state that once the LISA is open by Nutmeg then Nutmegs start date still applies to the LISA in general. I'm less worried now. The customer service operator automatically new I was using Nutmeg so I wonder if they have had a lot of enquires.
    Last edited by Chapuys; 02-11-2017 at 11:18 AM.
    Anything I say in no way constitutes financial advice and anything you do is your own decision.
    • peter_333
    • By peter_333 2nd Nov 17, 11:22 AM
    • 47 Posts
    • 11 Thanks
    peter_333
    Your LISA has to be open a year before use. That means anyone switching (unless I'm horribly wrong) would have to wait until next November to use it to buy a house as you are opening a new LISA. I am frustrated like the OP because of this reason as my plans to buy in the early Summer may need to change.

    I plan to complain officially but doubt it will do anything. I am already eyeing up Skipton for December 9th (after my yearly ISA interest is paid out on my HTB ISA). I'm also wondering whether I should keep my £6k HTB ISA as just a regular saver and forgo the 25% bonus as I still get 3.5% on my HTB ISA.
    Originally posted by Chapuys
    My understanding of the "one year" rule, is that the year starts from the time you open the LISA. If you transfer your LISA to a different provider, you are not closing the account and opening another, you are simply keeping the same LISA open but moving it to the care of a different institution. So if you opened your LISA April 2017, and transfer it to another provider in November 2017, your "one year" date to qualify for the 25% top-up is still April 2018.

    I'm not sure what benefit there is in keeping your "£6K HTB as a regular saver", as the 25% top-up is surely far better value than the 3.5% the bank pays. Am I missing something?
    • peter_333
    • By peter_333 2nd Nov 17, 11:56 AM
    • 47 Posts
    • 11 Thanks
    peter_333
    Just chatted with AJ Bell. They confirmed that the ability to transfer an existing LISA to them will be available before the end of the year. So AJ Bell seems to be an option.

    That is, of course, assuming I'm willing to once again believe the promises of a financial provider regarding the future availability of ISA transfer services. :-D
    • Alexland
    • By Alexland 2nd Nov 17, 7:27 PM
    • 787 Posts
    • 487 Thanks
    Alexland
    Now you are seeing why so few financial institutions want to get involved with the complexity of the product!

    Still if you are willing to put up with the hassle it can be beneficial depending on your circumstances.

    Our Nutmeg LISAs just hit £4170 today - at this rate the investment may earn more than the bonus :-)
    Last edited by Alexland; 02-11-2017 at 7:32 PM.
    • Ed-1
    • By Ed-1 2nd Nov 17, 7:49 PM
    • 2,043 Posts
    • 1,102 Thanks
    Ed-1
    Now you are seeing why so few financial institutions want to get involved with the complexity of the product!

    Still if you are willing to put up with the hassle it can be beneficial depending on your circumstances.

    Our Nutmeg LISAs just hit £4170 today - at this rate the investment may earn more than the bonus :-)
    Originally posted by Alexland
    Hopefully once this one-off element of complexity is taken out of the equation after 2017/18 then more will come on board...
    • Alexland
    • By Alexland 3rd Nov 17, 6:38 AM
    • 787 Posts
    • 487 Thanks
    Alexland
    Maybe but for those who fail to buy a property then its still very difficult to explain why there is a penalty before they can have their money back.
    • Chapuys
    • By Chapuys 3rd Nov 17, 9:30 AM
    • 145 Posts
    • 115 Thanks
    Chapuys
    Maybe but for those who fail to buy a property then its still very difficult to explain why there is a penalty before they can have their money back.
    Originally posted by Alexland
    I don't see it as difficult, it's obvious. There is a penalty because I see it as essentially a retirement product - like a long term fixed bond - which you happen to be able to access to buy a house with without the penalty.

    Why a lot of financial institutions do not like the Lifetime ISA isn't really to do with the 25% penalty. It's to do with a possible future miss selling scandal. It isn't the best way to save for a pension, so they don't want to be accused of encouraging people into a Lifetime ISA and then those people pulling themselves out of a lot better workplace pensions. Thats why Skipton & co are very adamant that they have not given you financial advice when signing up to the Lifetime ISA.
    Anything I say in no way constitutes financial advice and anything you do is your own decision.
    • howzat92
    • By howzat92 6th Nov 17, 7:10 PM
    • 3 Posts
    • 0 Thanks
    howzat92
    I am also very annoyed at Nutmeg however I got fed up of their constant rubbish about not knowing when the transfer system would come in and started the process of moving my money to Skipton LISA instead.

    Seems it was a good decision as a week later they released the statement saying they are not offering the transfer. Ridiculous service - only signed up to it with them as I assumed I could transfer in my H2B ISA so they were making money from everyone who transferred in whilst our money was in there with possibly no intention to set up the transfer service.
    • Alexland
    • By Alexland 6th Nov 17, 7:58 PM
    • 787 Posts
    • 487 Thanks
    Alexland
    I doubt they make money from short term account holders as their fee is relatively low and the admin costs for gaining and exciting a customer are high. I believe it was genuinely their ambition to get the facility online. Hopefully with rising markets you will have made a slightly better return than a cash product.
    • Chapuys
    • By Chapuys 10th Nov 17, 8:55 PM
    • 145 Posts
    • 115 Thanks
    Chapuys
    I doubt they make money from short term account holders as their fee is relatively low and the admin costs for gaining and exciting a customer are high. I believe it was genuinely their ambition to get the facility online. Hopefully with rising markets you will have made a slightly better return than a cash product.
    Originally posted by Alexland
    More than likely it was created just to advertise Nutmeg itself 'one of the few LISA providers' a loss leader. I didn't really know of Nutmeg before LISA came out and I gave it a £100 punt. I then decided to use it for £5,000 savings investment. They now have no intention for developing LISA now they have used it for their advertising potential.
    Anything I say in no way constitutes financial advice and anything you do is your own decision.
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