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  • FIRST POST
    • MSE Helen Saxon
    • By MSE Helen Saxon 16th Mar 16, 5:06 PM
    • 75Posts
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    MSE Helen Saxon
    Lifetime ISAs guide
    • #1
    • 16th Mar 16, 5:06 PM
    Lifetime ISAs guide 16th Mar 16 at 5:06 PM
    Hi!

    This is the discussion thread for the



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    Thanks folks,
Page 40
    • sybil44
    • By sybil44 23rd Jun 17, 12:03 PM
    • 1 Posts
    • 0 Thanks
    sybil44
    2- 16 year olds and an 18 year old
    Hi,
    I have twin boys who have just turned 16 and an 18 year old. I would like to save for their first houses. where we live this will be more than the £250,000 limit so a lisa will be better but you have to be 18 for a lisa . I want to save exactly the same for all of them. so can I open them all a help to buy isa now and transfer all 3 of them to a lifetime isa in 2 years time when they are all 18 or over? the only info I can find is transferring a help to buy isa to life time isa by April next year but i need to wait till May 2019 to transfer because of the age constraints is still possible to swap after 2 years.
    Thanks in advance
    Sybil
    • eskbanker
    • By eskbanker 23rd Jun 17, 12:51 PM
    • 4,757 Posts
    • 4,498 Thanks
    eskbanker
    I have twin boys who have just turned 16 and an 18 year old. I would like to save for their first houses. where we live this will be more than the £250,000 limit so a lisa will be better but you have to be 18 for a lisa . I want to save exactly the same for all of them. so can I open them all a help to buy isa now and transfer all 3 of them to a lifetime isa in 2 years time when they are all 18 or over? the only info I can find is transferring a help to buy isa to life time isa by April next year but i need to wait till May 2019 to transfer because of the age constraints is still possible to swap after 2 years.
    Originally posted by sybil44
    Yes, they (not you, they need to do all this themselves) can transfer from HTB to LISA anytime - the transitional arrangement for this tax year relates solely to transferring older HTB funds into a LISA without counting towards the £4K annual LISA allowance. Transfers of HTBs to LISAs in subsequent years are possible but are treated as current year subscriptions to the LISAs and are therefore capped at the annual allowance of £4K.

    The official version is at section 9B.17 of https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/603261/ISA_Lifetime_ISA.pdf

    Incidentally, the government documentation on HTB starting age is contradictory! According to the FAQ they can be opened by "Anyone who is over 16" but the full scheme rules clarify "16 years of age or over".
    • eskbanker
    • By eskbanker 23rd Jun 17, 1:05 PM
    • 4,757 Posts
    • 4,498 Thanks
    eskbanker
    Obvious question but I can't find an answer and I'm in a quandry as to whether to save in a (cash) Lifetime Isa or Help to Buy.. There are reports that with the interest rate being so poor in a Lifetime Isa, despite the fact you can put bigger lump sums in than with a Help to Buy, you would still eventually lose out compared to the H2B with biggest ineterst rates. Is this true? I would have enough for a healthy deposit for my first home, so I'm not too bothered about not being able to use the H2B for that, and I'm looking a couple of years down the line, so I'm not bothered about the money being held in the Lifetime Isa for a year either. My problem is working out whether my money would be better off in a H2B where you can put less in, or a Lifetime Isa where you can save more but have a very low interest rate. I have a poorly paid job, but savings, some of which are in accounts that have good interest rates, up to a limit, and I want to save the rest in one of theses. Can anyone advise me??
    Originally posted by CatGilmurray
    It's impractical to work out what's best for you based on that information as there are too many unknown variables - all the relevant lump sums and interest rates need to be factored in, as would the length of time you're planning to save.

    HTBs do indeed pay better interest than the only cash LISA on the market so far, but as you say the contribution caps differ and so the 25% of the larger LISA amount is likely to be worth having, dependent obviously on what that money would otherwise be earning.
    • CatGilmurray
    • By CatGilmurray 23rd Jun 17, 4:47 PM
    • 2 Posts
    • 0 Thanks
    CatGilmurray
    It's impractical to work out what's best for you based on that information as there are too many unknown variables - all the relevant lump sums and interest rates need to be factored in, as would the length of time you're planning to save.

    HTBs do indeed pay better interest than the only cash LISA on the market so far, but as you say the contribution caps differ and so the 25% of the larger LISA amount is likely to be worth having, dependent obviously on what that money would otherwise be earning.
    Originally posted by eskbanker
    Thanks, I guess I'll have to get my calculator out! I just don't want to make a mistake when certain newspapers and warning against the Lifetime Isa, or saying it's not what it's cracked up to be. One even said that due to it's poor interest rate even if you maxed it out on all the money you can potentially put into it, you'd still be losing money compared to a H2B with good interest rate...
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