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  • FIRST POST
    • MSE Helen Saxon
    • By MSE Helen Saxon 16th Mar 16, 5:06 PM
    • 75Posts
    • 42Thanks
    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



    Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.


    Thanks folks,
Page 1
    • veryintrigued
    • By veryintrigued 16th Mar 16, 5:40 PM
    • 2,026 Posts
    • 1,265 Thanks
    veryintrigued
    • #2
    • 16th Mar 16, 5:40 PM
    • #2
    • 16th Mar 16, 5:40 PM
    There is already lots of discussion on the following thread. Can it be merged?

    http://forums.moneysavingexpert.com/showthread.php?t=5431540

    Indeed your colleague has created yet another unrequired thread (in the wrong section)

    http://forums.moneysavingexpert.com/showthread.php?t=5431666
    Last edited by veryintrigued; 16-03-2016 at 5:43 PM.
    • koru
    • By koru 19th Mar 16, 12:33 PM
    • 1,257 Posts
    • 638 Thanks
    koru
    • #3
    • 19th Mar 16, 12:33 PM
    • #3
    • 19th Mar 16, 12:33 PM
    I think LISAs provide yet another reason why students should always take the maximum student loan that they are permitted. If the student has, or their parents are willing to provide, cash that they could use to cover tuition fees or living costs, it is already the case that it would be better to hang on the cash. (See Martin's guide on this.) But there's now the extra reason that you can put the cash into a LISA, and get a 25% uplift from the government.
    Edit: Of course this only applies to £4k a year. A student loan could be increased by up to £17,200 per year. However, you could slowly move all of this into a LISA, at the rate of £4k per year, though you might be into your 30s before you have moved it all!
    Last edited by koru; 19-03-2016 at 6:51 PM.
    koru
    • koru
    • By koru 19th Mar 16, 6:55 PM
    • 1,257 Posts
    • 638 Thanks
    koru
    • #4
    • 19th Mar 16, 6:55 PM
    • #4
    • 19th Mar 16, 6:55 PM
    One tricky decision might come when you are ready to buy a house, if you have not yet been able to move all your cash into a LISA. Do you use all your money to pay the maximum deposit, or do you just use what is in the LISA, and keep the rest so you can move it into a LISA over the coming years, and get the 25% uplift? Trouble is, you then have to wait til you are 60 to benefit from the 25% uplift.
    koru
    • julianv
    • By julianv 21st Mar 16, 2:33 PM
    • 1 Posts
    • 1 Thanks
    julianv
    • #5
    • 21st Mar 16, 2:33 PM
    Details
    • #5
    • 21st Mar 16, 2:33 PM
    Two things I don't know about are:

    - Does the govt's £1000 contribution count to our personal ISA limit? ie do we only have to find £19k, or do we contribute £20k across all our ISAs and the govt's £1k is additional (in effect making net contributions £21k).

    - If you 'roll-in' a Help To Buy ISA but circumstances change and we don't use a LISA to fund a house, can we still use the bonus cash for retirement, or do we forfeit the bonus?

    thanks
    • parchedpeas
    • By parchedpeas 21st Mar 16, 4:09 PM
    • 21 Posts
    • 4 Thanks
    parchedpeas
    • #6
    • 21st Mar 16, 4:09 PM
    • #6
    • 21st Mar 16, 4:09 PM
    At the moment - although it will change - you could put the £4k in, get a free £1k and then withdraw it all and pay the 5% (£250) charge.

    A free £750 a year.

    Nice.
    • ringo_24601
    • By ringo_24601 21st Mar 16, 4:14 PM
    • 16,905 Posts
    • 27,446 Thanks
    ringo_24601
    • #7
    • 21st Mar 16, 4:14 PM
    • #7
    • 21st Mar 16, 4:14 PM
    At the moment - although it will change - you could put the £4k in, get a free £1k and then withdraw it all and pay the 5% (£250) charge.

    A free £750 a year.

    Nice.
    Originally posted by parchedpeas
    Nope.. the government won't give you the 'free' money if you withdraw it before you are 60, or buying a 1st house. I think having a terminal illness is a criteria they are allowing for getting the money back.
    • richyg
    • By richyg 21st Mar 16, 8:16 PM
    • 133 Posts
    • 144 Thanks
    richyg
    • #8
    • 21st Mar 16, 8:16 PM
    • #8
    • 21st Mar 16, 8:16 PM
    Sorry I am late to the party on this but if the government is planning on giving people under 40 some free money in a tax free environment at a 20/25 % rate on the condition that it stays invested for a long time is it just me or is there a whiff of this being what the future state pension is going to look like.

    Or am I just a cynic.
    • Angel316
    • By Angel316 22nd Mar 16, 1:04 PM
    • 13 Posts
    • 2 Thanks
    Angel316
    • #9
    • 22nd Mar 16, 1:04 PM
    • #9
    • 22nd Mar 16, 1:04 PM
    What about shared ownership? Could you save in a Lifetime ISA and use it to staircase?
    • tim_n
    • By tim_n 22nd Mar 16, 5:23 PM
    • 1,565 Posts
    • 1,315 Thanks
    tim_n
    Am I right in thinking I can put £16k into a S&S ISA on 7th April 2017 and £4k into a LISA, and get the additional £1k, giving me £21k at the end of the year?
    Tim
    • tim_n
    • By tim_n 22nd Mar 16, 5:28 PM
    • 1,565 Posts
    • 1,315 Thanks
    tim_n
    At the moment - although it will change - you could put the £4k in, get a free £1k and then withdraw it all and pay the 5% (£250) charge.

    A free £750 a year.

    Nice.
    Originally posted by parchedpeas
    You lose the £1k AND 5%
    Tim
    • Comping Rich
    • By Comping Rich 23rd Mar 16, 8:46 AM
    • 3,717 Posts
    • 211,982 Thanks
    Comping Rich
    Do you think first time buyers could use it to buy a house boat / canal boat?
    • tim_n
    • By tim_n 23rd Mar 16, 9:13 AM
    • 1,565 Posts
    • 1,315 Thanks
    tim_n
    Do you think first time buyers could use it to buy a house boat / canal boat?
    Originally posted by Comping Rich
    Generally boat "Mortgages" are just loans - not actual mortgages. That's because boats are an absolute nightmare to finance because they can be fine one day (£100,000) and sunk (£0+scrap) the next. I'm sure someone more knowledgeable will probably say something different, but I wouldnt get your hopes up...
    Tim
    • King Of Fools
    • By King Of Fools 23rd Mar 16, 9:44 AM
    • 1,545 Posts
    • 588 Thanks
    King Of Fools
    In the LISA guide it says:

    A little aside...

    Not to do with your choice, but it's worth taking a look at the real cleverness behind this from the Treasury. If people use a LISA rather than a pension, as it comes from taxed income it gets the Treasury tax revenue now. If people put it in a pension, the Treasury has to wait years until it gets tax. So, this could be Mr Osborne cleverly grabbing cash out of future Chancellors' pockets.

    I do not really understand this because it also says that the bonus is paid at the end of the tax year so surely it is only delaying the tax refund for up to a year.
    • IceSkater10
    • By IceSkater10 23rd Mar 16, 10:14 AM
    • 1 Posts
    • 0 Thanks
    IceSkater10
    That's interesting that if you are a couple and one of you owns a house, that the other can use their LISA to purchase another home. Under the new stamp duty rules, wouldn't you both classed as second time buyers in this instance?
    • DanH19
    • By DanH19 23rd Mar 16, 10:52 AM
    • 1 Posts
    • 0 Thanks
    DanH19
    Questions on LISA
    Hi,


    I have a couple of questions about the soon to be introduced LISAs:


    - If I invest £4k in Y1 (and get £1k on top), and then invest £4k in Y2 (so have £9k in total), will I get a bonus of 25% on £9k or just the £4k that I have invested in Y2?


    - If I merge the amount I have in my H2B ISA when I open a LISA in Apr 17, will I get 25% interest on that at the end of Y1?


    Thanks,

    DanH19
    • Ed-1
    • By Ed-1 23rd Mar 16, 11:52 AM
    • 1,975 Posts
    • 1,057 Thanks
    Ed-1
    Hi,


    I have a couple of questions about the soon to be introduced LISAs:


    - If I invest £4k in Y1 (and get £1k on top), and then invest £4k in Y2 (so have £9k in total), will I get a bonus of 25% on £9k or just the £4k that I have invested in Y2?


    - If I merge the amount I have in my H2B ISA when I open a LISA in Apr 17, will I get 25% interest on that at the end of Y1?


    Thanks,

    DanH19
    Originally posted by DanH19
    You just get the 25% bonus on your contributions (up to 4k) each year. However you get the 25% on the full balance of money transferred from a Help to Buy ISA if it is transferred in tax year 17/18. Moreover Help to Buy money deposited prior to 6 April 2017 and transferred into a LISA does not count against the 4k LISA allowance in Y1. So you can get the bonus on a maximum of 8.4k +'any interest transferred over from the Help to Buy ISA in Y1 as 4.4k + interest is the maximum you can transfer over from a Help to Buy ISA without it counting against the LISA allowance.
    • greensalad
    • By greensalad 23rd Mar 16, 12:03 PM
    • 1,217 Posts
    • 1,881 Thanks
    greensalad
    I have a few questions about the new LISA. My debt free date will be early Jan next year, and my partner and I would like to start saving for a house.

    I understand you can only save £4k a year (each). We're looking to save about £2k a month each so obviously we'd fill up own LISA's in about 4 months... so we'd need a plan for what to do after we've filled them.

    Can you still hold a standard ISA alongside a LISA? Is it a separate product like the H2B ISA?
    Last edited by greensalad; 23-03-2016 at 12:06 PM.
    • Ads1
    • By Ads1 23rd Mar 16, 12:04 PM
    • 18 Posts
    • 1 Thanks
    Ads1
    I am trying to work out of the LISA would be any good for me.
    I work for a large company who has a defined benefit pension (final salary). I have been paying in to since I was 18. I will be 37 when the LISA in introduced.
    I already have bought my first home. So would only be able to draw on the LISA when I am 60.

    Would it be worth investing in a LISA? and can you have an ISA as well as a LISA? At the moment I have savings in an ISA for maybe one day moving to a bigger property.

    Hopefully someone will have the answers.
    Cheers
    Adam
    • Ed-1
    • By Ed-1 23rd Mar 16, 12:06 PM
    • 1,975 Posts
    • 1,057 Thanks
    Ed-1
    I have a few questions about the new LISA. MY debt free date will be early Jan next year, and my partner and I would like to start saving for a house.

    I understand you can only save £4k a year (each). We're looking to save about £2k a month each so obviously we'd fill up own LISA's in about 4 months... so we'd need a plan for what to do after we've filled them.

    Can you still hold a standard ISA alongside a LISA? Is it a separate product like the H2B ISA?
    Originally posted by greensalad
    The H2B ISA isn't a separate product - it's a cash ISA so you can only pay into one cash ISA per year. The lifetime ISA however is a separate product so you can pay into that and a cash ISA in the same year.
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