Lifetime ISAs guide

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  • eddiejones
    eddiejones Posts: 114 Forumite
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    Well I'm sceptical that it's correct but Skipton tell me that my allowance is £1999 (i.e. £4k - £1 original balance - £2000 HTB contributions for 17-18).

    That is despite interest payments in Jan, and Feb (when account was closed), some of which would be interest on 17-18 contributions.

    Perhaps the £46 is what they say is the interest for your girlfriend's 17-18 HTB contributions? Presumably she got some more interest when the HTB ISA was closed?
  • ferpesin
    ferpesin Posts: 4 Newbie
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    Yes eddiejones, she got paid £3 on closing(so total interest paid £51).
    What I don't understand is why the different criteria? I have interest payments through all 17/18 tax year and none counted. Also, as I read before, why interest paid into an ISA wrapper now counts towards your ISA allowance.
    I think this is a mess and not fair.

    Kind regards
  • eskbanker
    eskbanker Posts: 31,047 Forumite
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    ferpesin wrote: »
    Yes eddiejones, she got paid £3 on closing(so total interest paid £51).
    What I don't understand is why the different criteria? I have interest payments through all 17/18 tax year and none counted. Also, as I read before, why interest paid into an ISA wrapper now counts towards your ISA allowance.
    I think this is a mess and not fair.
    As per previous posts on this thread, the official position is that HTB interest earned/accrued up to 5 April 2017 doesn't count towards the £4K LISA limit when transferred (during 2017/18) but anything since then does, so it sounds like your girlfriend's transfer is the one being processed correctly and yours is the one that isn't.

    HTB interest paid during 2017/18 does count towards the annual £4K LISA limit when transferring but not the overall £20K ISA allowance for 2017/18, as transfers between ISA products never affect the latter.
  • eddiejones
    eddiejones Posts: 114 Forumite
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    eskbanker wrote: »
    As per previous posts on this thread, the official position is that HTB interest earned/accrued up to 5 April 2017 doesn't count towards the £4K LISA limit when transferred (during 2017/18) but anything since then does, so it sounds like your girlfriend's transfer is the one being processed correctly and yours is the one that isn't.

    HTB interest paid during 2017/18 does count towards the annual £4K LISA limit when transferring but not the overall £20K ISA allowance for 2017/18, as transfers between ISA products never affect the latter.

    Right. What happens if I pay *too much* into my LISA? I.e. Skipton tell me an amount which is clearly wrong as doesn’t include any interest at all. If all that happens is that the excess is refunded at some point, then I am happy to make a bit of a guess...
  • Ed-1
    Ed-1 Posts: 3,892 Forumite
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    eddiejones wrote: »
    Right. What happens if I pay *too much* into my LISA? I.e. Skipton tell me an amount which is clearly wrong as doesn’t include any interest at all. If all that happens is that the excess is refunded at some point, then I am happy to make a bit of a guess...

    The system won't let you pay in more than your LISA allowance.
  • eddiejones
    eddiejones Posts: 114 Forumite
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    Is the 'system' Skipton's system? Because they (under my understanding) have a wrong view of what my allowance is.

    They exclude all interest. Even though some of that paid in Jan 18 and in Feb when closing the account applies to 17-18 contributions.
  • Ed-1
    Ed-1 Posts: 3,892 Forumite
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    eddiejones wrote: »
    Is the 'system' Skipton's system? Because they (under my understanding) have a wrong view of what my allowance is.

    They exclude all interest. Even though some of that paid in Jan 18 and in Feb when closing the account applies to 17-18 contributions.

    They are the ones reporting what you've contributed to HMRC.
  • eddiejones
    eddiejones Posts: 114 Forumite
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    Ed-1 wrote: »
    They are the ones reporting what you've contributed to HMRC.

    Right, ok. So if they let me contribute more than they probably should, that's good for me :).
  • Tumble1620
    Tumble1620 Posts: 10 Forumite
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    Hi,


    I have been reading into the help to buy and LISA accounts and decided as I am aiming to buy next year and I am saving for a desposit, the LISA account would be perfect for me. I made out a plan to save the £4k in a LISA over the next 12 months and the remaining savings in my current ISA account I have open with bank of scotland.


    Before I went ahead and opended the LISA account I was unsure if i could have bother LISA and ISA, to my finindgs I could as long as the £20k tax free limit was met, £4k in LISA £16k in ISA - made perfect sense and I had a plan.


    Last week I went ahead and opended a Skipton LISA account and on my way to saving £4k wih a 25% bonus in 12 months :):):)


    I had a meeting with the bank of scotland today to degrade my account and stop wasting £15 a month for beneifts i never use! I mentioned the LISA account to them and to my suprise I was advised that as I am funding a LISA with Skipton I am unable to fund my ISA with the bank of scotland? I cant even split the £20k?


    Made me very confused........ I contacted Skipton who reconfirmed I can have 1 LISA and 1 ISA as long as I dont go over my limit and suggest I contact bank of scotland to clarify!


    Before I call them and get confused with their bank talk as I am struggling to understand LISA and ISA at the best of times, thought I would best post and see is someone could explain and help me understand :(


    Thanks in advance :)
  • Alexland
    Alexland Posts: 9,653 Forumite
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    edited 9 March 2018 at 6:39PM
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    donnadrake wrote: »
    I had a meeting with the bank of scotland today to degrade my account and stop wasting £15 a month for beneifts i never use! I mentioned the LISA account to them and to my suprise I was advised that as I am funding a LISA with Skipton I am unable to fund my ISA with the bank of scotland? I cant even split the £20k?

    Whoever you spoke to was misinformed, you are allowed to contribute up to £20k total per year across the 4 types of adult ISA (observing the special contribution limits that apply to HTB and LISA).

    1) Cash ISA (inc HTB ISA)
    2) S&S ISA
    3) Lifetime ISA (cash or s&s)
    4) IF ISA

    So adding £4k to the LISA and £16k into one of the other 3 types of ISA would be fine.

    Maybe they thought a LISA in cash was a type of Cash ISA such as a HTB ISA.

    Still if they don't sell the LISA you can't blame them for not being trained on it.

    Alex.
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