Lifetime ISAs guide

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  • Bryando
    Bryando Posts: 1,464 Forumite
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    I would use this if a bank was offering. Not willing to risk in shares/stocks. Why are banks not offering it?
  • eskbanker
    eskbanker Posts: 31,062 Forumite
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    Bryando wrote: »
    I would use this if a bank was offering. Not willing to risk in shares/stocks. Why are banks not offering it?
    Some will (after it's launched), but only once they've had a chance to design and implement products that comply with the rules of the scheme once it's finalised. Keep an eye on http://www.moneysavingexpert.com/savings/lifetime-ISAs#bestbuys
  • Damorin
    Damorin Posts: 3 Newbie
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    One thing that hasn't been too clear for me so far.

    If I get a LISA and use it to buy a house, can I then still use it to save afterwards for retirement?

    I took a look through the FAQ and a few of the posts here but I can't seem to find the answer. Apologies if I missed it somewhere!

    Thanks.
  • masonic
    masonic Posts: 23,277 Forumite
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    Damorin wrote: »
    One thing that hasn't been too clear for me so far.

    If I get a LISA and use it to buy a house, can I then still use it to save afterwards for retirement?

    I took a look through the FAQ and a few of the posts here but I can't seem to find the answer. Apologies if I missed it somewhere!
    Yes you can. If you are using a cash provider to save for your mortgage deposit, you may wish to transfer to a provider that offers S&S once you have made your withdrawal.
  • System
    System Posts: 178,094 Community Admin
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    masonic wrote: »
    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.


    Sorry, going back to this... If I open a HTB tomorrow and chuck £1200 in it by end of March (1st month MAX) and then transfer it over to a LISA when one becomes available -- I'll still see a gov bonus on the HTB even though it didn't hit the £1600 threshold then ??!

    Appreciate the help.
  • masonic
    masonic Posts: 23,277 Forumite
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    NevvyC wrote: »
    Sorry, going back to this... If I open a HTB tomorrow and chuck £1200 in it by end of March (1st month MAX) and then transfer it over to a LISA when one becomes available -- I'll still see a gov bonus on the HTB even though it didn't hit the £1600 threshold then ??!

    Appreciate the help.
    That's correct. You can also make a £200 payment at the beginning of April, before the end of the tax year.
  • System
    System Posts: 178,094 Community Admin
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    masonic wrote: »
    That's correct. You can also make a £200 payment at the beginning of April, before the end of the tax year.


    Right I'm with you now... So what's the point in the £1600 threshold then if I'll see a bonus on this 1200 / 1400 (if I add 200 before April 5th) regardless ?

    (Unless the HTB has to hit £1600 before I can transfer it across to any LISA to see a bonus ? And then only sees the bonus on whatever amount I managed to deposit prior to April 5th ....?)

    Will get on this tomorrow if that's accurate.
  • Ed-1
    Ed-1 Posts: 3,892 Forumite
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    edited 22 March 2017 at 5:39PM
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    NevvyC wrote: »
    Right I'm with you now... So what's the point in the £1600 threshold then if I'll see a bonus on this 1200 / 1400 (if I add 200 before April 5th) regardless ?

    (Unless the HTB has to hit £1600 before I can transfer it across to any LISA to see a bonus ? And then only sees the bonus on whatever amount I managed to deposit prior to April 5th ....?)

    Will get on this tomorrow if that's accurate.

    The point of the £1,600 minimum balance on the H2B ISA to get the H2B bonus is to avoid people claiming miniscule bonuses for house purchase, the cost of admin for which wouldn't be worth it.

    The LISA bonus is paid into the account anyway (whereas with the H2B ISA, the H2B bonus isn't paid into the H2B account; it's claimed after closure) automatically so there is no requirement for a minimum balance on the LISA to get a bonus as it's applied automatically on all LISA contributions; with H2B ISA it's a separate process to claim the bonus.

    You can transfer any amount from the H2B ISA built up before 6th April 2017 into LISA and you'll get a 25% top up in the LISA as you will with any money put into a LISA. It's not the 'H2B bonus' as such.
  • Danniegorton10
    Danniegorton10 Posts: 1 Newbie
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    Hi,


    Looking for a bit of advice. Me and Husband have taken some time to go through out finances now that we are almost debt free, and have set up a plan to start paying into a Lifetime ISA from next month however feel like there is none available that seem to be prepared for this change. I am happy to wait until next year when the highstreet banks have them available and more is known about them, however my question is where do I save the cash in the meantime? Just in a savings account, or should we open a Help to Buy ISA for a year and then transfer to the LISA in a years time?


    Thanks in advance for any help,


    Dannie
  • System
    System Posts: 178,094 Community Admin
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    Ed-1 wrote: »
    The point of the £1,600 minimum balance on the H2B ISA to get the H2B bonus is to avoid people claiming minuscule bonuses for house purchase.

    The LISA bonus is paid into the account anyway (whereas with the H2B ISA, the H2B bonus isn't paid into the H2B account; it's claimed after closure) automatically so there is no requirement for a minimum balance on the LISA to get a bonus as it's applied automatically on all LISA contributions; with H2B ISA it's a separate process to claim the bonus.

    You can transfer any amount from the H2B ISA built up before 6th April 2017 into LISA and you'll get a 25% top up in the LISA as you will with any money put into a LISA. It's not the 'H2B bonus' as such.


    This is my point...

    How can it still be 'best practice' as recommended by MSE to open a H2B ISA at this stage (when a LISA is more generous...) you'd just have to transfer your H2B into the LISA anyways and at this late stage wouldn't reach the £1600 threshold before April 5th (max obtainable would be 1400 now - meaning missing out on the gov bonus on the H2B as it didn't meet the 1600 criteria)

    Unless masonic's point is correct (and you would see 25% bonus on the H2B sum deposited prior to April 5th 2017 -- so long as you keep the H2B ISA open and hit that £1600 threshold before transferring to the LISA -- but then, in theory, why not KEEP running the H2B alongside the LISA for the year, earning interest, and then at the last chance to merge the 2, do-so, so your money is working for you accruing interest..)

    Thanks in advance
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