LISA monthly bonus

thatoldchestnut · 3 January 2018 at 8:58AM

Apologies if this has been asked before or belongs in the house buying forum, but I had a couple of questions about the monthly bonus that will be paid to those with a LISA from April onwards.

I have the Skipton Cash LISA and have been able to put in £4,000 so I expect to get the £1,000 (25%) bonus by the end of March. I am putting money aside at the moment to transfer in from April 2018 onwards, but If I am only able to put in, say, £400 in April, aren’t I going to lose out? The government can’t assume I’m going to max it out again in 2018/19 (though that is my intention). Or do they just retrospectively adjust the bonus month to month so that if I have got another £4,000 in there by March 2019, I get the full £1,000 bonus?

Similarly, say you paid in £4,000 in one go in the following April, would you have to wait for another twelve months to get the bonus or would you receive it as you were withdrawing it to buy a house?

Hope a) that all makes sense and b) I haven’t grossly misunderstood the way the scheme works!

bowlhead99 · 3 January 2018 at 9:34AM

For the first tax year of LISA operation, to make it manageable for the financial institutions, they will wait until the end of the tax year by which time you have made all your 2017/18 contributions and transfers in from other products like HTB etc, and the LISA manager will report the appropriate figure to claim the bonus for you, which will be credited early in the 2018/19 tax year.

Then going forward (i.e. for the 2018/19 year and beyond) the bonus will be claimed month to month by the LISA manager from the government based on what contributions you make into the account. There will be some time-lag, but it doesn't involve waiting all the way to end of a tax year.

So, you don't have to wait 12 months to get those future bonuses. But you do need to have had a LISA for 12 months (including previous LISAs transferred-in) to be allowed to take the money out penalty-free for a property purchase.

thatoldchestnut · 5 January 2018 at 8:33AM

bowlhead99 wrote: »

Then going forward (i.e. for the 2018/19 year and beyond) the bonus will be claimed month to month by the LISA manager from the government based on what contributions you make into the account. There will be some time-lag, but it doesn't involve waiting all the way to end of a tax year.

So, you don't have to wait 12 months to get those future bonuses. But you do need to have had a LISA for 12 months (including previous LISAs transferred-in) to be allowed to take the money out penalty-free for a property purchase.

Thanks for the reply. Ah I see, I think I assumed that ‘monthly’ meant split over twelve months and paid on a monthly basis rather than it just meaning you get the bonus sooner. So say I put another £1,000 in in April, they would top it up by £250 straight away (or within a month or so at least) rather than dividing that amount by twelve months and paying £20.83 a month or whatever it is, and then adjusting the amounts when I pay more in. That makes more sense if so! Don’t know why I assumed they would do it in such a convoluted way!

LISA monthly bonus

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