Lifetime ISAs guide
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Because you are wrong about not seeing a bonus on the transferred funds. You will get a bonus on any money paid into the HTB ISA by 5th April and transferred to the LISA in addition to the bonus on up to £4000 paid into the LISA.
But you certainly could use a 5% regular saver to build up a lump sum to be dumped into your LISA at the end of the next tax year.
Thanks for your reply
But you only see the H2B bonus when it has hit the £1600 threshold..... ?
(With all this information and different stipulations flying around) it gets confusing...!
Stay with me here -- but the gov bonus is only active when the H2B has reached the minimum £1600 required (earning a £400 bonus) -- ergo, the earliest I could achieve that now would be May, ie. after the April deadline
(For instance: 3 deposits MIN ... If I were to open the H2B tomorrow, maximise using the 1200 by end of March; 200 1st of April; 200 1st of May)
....unless the H2B 25% bonus would be paid on just the first £1400 (or 1200 depending whether I made the 2nd deposit prior to or after April 5th) ... regardless; so long as I wait until the H2B balance reaches £1600 before transferring - I'm golden, is that accurate ?
(Essentially whatever amount deposited into H2B prior to end of tax year sees bonus, even though you wait until it hits the £1600 figure to transfer to LISA & leaving me with the remainder of 3800 / 3600 allowance to add - depending on when I make deposit 2 in April) and also then see 25% bonus on the balance (up to 4K point) in the LISA (even though the balance may be for example £5600) after year1
Would I be correct in saying that ?
I also rang Barclays (best H2B rate currently) after posting my first comment and they seem to contradict what I've read on the MSE guides (they said that the H2B allowance wouldn't infringe on the LISA allowance if transferred in the same tax year, and in theory; to that effect I could continue to add £200pcm to a H2B and transfer the entire balance over to a LISA at the last possible point in time ie. the 1year deadline to merge the two, so say Feb 2018 and then still plunge 4K into the LISA ...AS WELL in March 2018 !?)
Would definitely use the regular 5% saver in conjunction then and any funds at the end of the year in that could be transfered to the LISA...0 -
That's correct about the HTB ISA bonus. However, you are looking to transfer into a LISA and get the LISA bonus where no such limit exists.But you only see the H2B bonus when it has hit the £1600 threshold..... ?
You can only get the bonus on the HTB ISA if you do not transfer into a LISA.Stay with me here -- but the gov bonus is only active when the H2B has reached the minimum £1600 required (earning a £400 bonus) -- ergo, the earliest I could achieve that now would be May, ie. after the April deadline
You do not need to wait until the balance is £1600 before transferring.....unless the H2B 25% bonus would be paid on just the first £1400 (or 1200 depending whether I made the 2nd deposit prior to or after April 5th) ... regardless; so long as I wait until the H2B balance reaches £1600 before transferring - I'm golden, is that accurate ?
There is no point in doing this as you can just put the money directly into the LISA. Any money you pay into the HTB ISA in the next tax year will come out of the £4000 allowance.I also rang Barclays (best H2B rate currently) after posting my first comment and they seem to contradict what I've read on the MSE guides (they said that the H2B allowance wouldn't infringe on the LISA allowance if transferred in the same tax year, and in theory; to that effect I could continue to add £200pcm to a H2B and transfer the entire balance over to a LISA at the last possible point in time ie. the 1year deadline to merge the two, so say Feb 2018 and then still plunge 4K into the LISA ...AS WELL in March 2018 !?)0 -
I usually put the maximum allowed into an ISA on the first day of the new tax year, can I do this for the full £20,000 and then transfer £4,000 over to a Lifetime ISA when more places start offering it? - Or would I need to keep £4,000 out of any type of ISA beforehand ?0
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You could use the full allowance and then transfer. But couldn't you get a better rate outside of an ISA?I usually put the maximum allowed into an ISA on the first day of the new tax year, can I do this for the full £20,000 and then transfer £4,000 over to a Lifetime ISA when more places start offering it? - Or would I need to keep £4,000 out of any type of ISA beforehand ?0 -
You could use the full allowance and then transfer. But couldn't you get a better rate outside of an ISA?
Thank you. Yes, but I'm hoping by building the amount I have in my ISA up when rates do improve in the future I will have a substantial amount in there (as lost years cannot be got back).0 -
Hi,
What is the likelihood of the government increasing the age you can withdraw the LISA. I could potentially use it as a bridge between 60 and my pension age but I am worried the Government will move the goalposts and say perhaps in future it can't be taken out until 65 for example?
Thanks0 -
That is what pensions are for?
It is intended that the earliest date will move up from 55 and track the State Pension Page less 10 years. It could be that the LISA and pension date could align at SPa plus 10?
All guesswork.0 -
That's correct about the HTB ISA bonus. However, you are looking to transfer into a LISA and get the LISA bonus where no such limit exists.
I was under the impression you could benefit from both bonuses ... Otherwise why is it beneficial to start a H2B ISA this late in the day (as MSE suggest as best practice still...) when I could just use the more generous LISA ?
You can only get the bonus on the HTB ISA if you do not transfer into a LISA.
:S In your original reply you posted : "Because you are wrong about not seeing a bonus on the transferred funds. You will get a bonus on any money paid into the HTB ISA by 5th April and transferred to the LISA in addition to the bonus on up to £4000 paid into the LISA." ?
You do not need to wait until the balance is £1600 before transferring.
The only reason I would wait to reach this figure would be to meet the threshold required for the gov bonus (which I thought you could benefit from coupled with the LISA bonus... Otherwise, like I said above; why bother starting a H2B ISA this late in the game...?)
There is no point in doing this as you can just put the money directly into the LISA. Any money you pay into the HTB ISA in the next tax year will come out of the £4000 allowance.
This is what I mean; that's contradicting what the Barclays Customer Service Rep has told me today ... (Which I thought seemed strange and your point seems more likely / accurate) I'm trying to maximise my gains but getting conflicting advice making it difficult to make a decision...
So returning to my original quandary -- what IS the point in opening a H2B ISA this late in the day when I could just wait for the LISA (and supplement it using a lump sum from a regular saver account at the end of the year...) if any money paid into the HTB in the next tax year counts towards the 4K allowance anyway ?
I'd be looking at doing one or the other if I cannot benefit from a bonus from BOTH now that it's this late in the tax year ... (No point running the two if I don't see a bonus from each?!) The reason I would have done it this way though would have been to accrue the interest in the H2B ISA (2.27% best rate with Barclays currently) before using it to lump into a LISA at last possible opportunity making my money work harder for me (and also, as I assumed, releasing the gov bonus from each...)
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Appreciate your replies (EDIT: sorry I couldn't figure out how to do the quoting properly!) 0 -
It is a risk. As greenglide wrote, it is more likely if the state pension age rises above 70. You can mitigate this risk by using a S&S ISA as well as a LISA and pension.skipfeeney wrote: »What is the likelihood of the government increasing the age you can withdraw the LISA. I could potentially use it as a bridge between 60 and my pension age but I am worried the Government will move the goalposts and say perhaps in future it can't be taken out until 65 for example?0
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