Lifetime ISAs guide
Comments
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I have both open, no issues.0
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Can anyone confirm whether or not the Nutmeg S&S LISA will require further installments after the first £100 deposit (I'd be aiming to transfer it to a cash LISA such as Skipton ASAP eg. in June 2017)
Cheers0 -
Nutmeg specify a minimum monthly contribution of £100 for those investing less than £5K but this is specified on their general ISA page (where they also specify their usual minimum starting payment of £500) rather than the LISA-specific page (where it's clear that you can start with £100).
I'd suggest that this means that LISA-specific rules override the generic ones (and hypothetically someone could pay in their whole annual LISA allowance of £4K in the first month and therefore wouldn't be allowed by HMRC to make any further contributions) but would recommend clarifying this directly with them.
There's no mention of minimum monthly funding in the 'summary box' shown when applying or the associated information pack, so if they do plan to impose it then they need their wrists slapping! Proceeding with a dummy application further brings up a message about "You'll be limited to this single payment at the start of our Lifetime ISA launch but we're adding the ability to make further payments soon" which suggests they can't even accept subsequent payments anyway (yet)!0 -
Proceeding with a dummy application further brings up a message about "You'll be limited to this single payment at the start of our Lifetime ISA launch but we're adding the ability to make further payments soon" which suggests they can't even accept subsequent payments anyway (yet)!
You are correct. I opened a Nutmeg Lisa with an initial payment of £500. I then transferred a cash ISA into my Nutmeg "General Pot" and wanted to put some of this into the LISA, however I couldn't find the option to do this. When I emailed their support address, Nutmeg responded saying exactly what you state - they don't yet have the functionality to take additional payments to the LISA, but will contact me when they do.
This was about a week ago. Curiouser and curiouser.....0 -
Upon receiving the 25% government bonus of say £1000 from the max of £4000 annually saved, can you “play” with that bonus, as in, can it be reinvested such as dividends can, i.e. Can I buy additional funds or shares with the bonus, or does it just sit there in the LISA account untouched? I understand the power of compounding, especially with dividends, and taken that this would be ok to do, you could potentially have a starting ground every year of +25% on your annual return WITHOUT the returns of other shares/funds that are already allocated. That’s like a 25% bonus dividend on any money that you invest (as long as it’s under £4000).
you can invest the bonus in the same way as any other cash inside the LISA. that's assuming it's a S&S LISA. or if it's a cash LISA, it earns interest in the same way as other cash inside the account.
so basically, the bonus multiples your initial deposit by 1.25 ... and then, if you can invest the cash in something that doubles the money, that will give you 1.25 x 2 = 2.5 times what you originally deposited. (except that this is ignoring that the bonus arrives later than your original deposit, so you don't have quite as long to invest it.)0 -
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grey_gym_sock wrote: »reminds me of the classic beatles song: Tax Lady.
not to mention: Lovely Leroy, Meter Boy.
Benny Lane, Ellery Rigby, Rudy in the Sky, Michael, Mon Beau,
Hey Jude, Nowhere Woman
I'll get my coat:p0 -
Nope. It's a Lifetime ISA.
There are 4 types of ISA set down in law:
Cash ISA,
Stocks and shares ISA,
Innovative finance ISA,
Lifetime ISA.
A Help to Buy ISA is a special type of cash ISA in law. A Lifetime ISA is a separate type of ISA completely which can hold either cash or stocks and shares.
This just shows how silly this has become. Too much overlap.
My idea:
Cash ISA: keep as is. The purchase of a house is already taken care of with HTB SubType ISAs. Allow 25% LISA-like £1k per year topup.
Stocks and shares ISA: Keep as is.
Innovative ISA: It's not innovating anything. Rename or merge with S&S? P2P... is just lending to someone else? Aren't you therefore a bond purchaser and others that need a loan are then paying you interest and the principal at the end of the term? Why not create a new type of P2P bond and then you can have it in your S&S ISA?
Lifetime ISA: This is like a "Pension ISA". With extra liquidity. With penalties. Get rid of. Why cant HMRC just give everyone an extra 25% on pension contribs for 18-40 year olds up to the annual limit of £1k? And allow partial withdrawals from that pot? Can't they give the 25% they would give for the house aspect into the HTB ISA?
What a mess!
Having said that, I'm undecided on the LISA and with the recent Monevator post, I will be leaning towards opening one sometime this year.Goals
Save £12k in 2017 #016 (£4212.06 / £10k) (42.12%)
Save £12k in 2016 #041 (£4558.28 / £6k) (75.97%)
Save £12k in 2014 #192 (£4115.62 / £5k) (82.3%)0 -
There needs to be some maths done on this....
The 25% is great, especially if Halifax give 4% pa. like they did with the Help to Buy. That 4% also applies to the 25% annual bonus.
However my funding circle account yields about 12% (but let's be conservative and say 8% as it's never a guaranteed amount). Because you only get the 25% once for every £ you put into the lifetime ISA - it means the longer I have the account the worse the deal is.
Assuming a 4% interest from the bank + 25% annual government bonus (only on the money payed in that year)
Year 1 you'd make 29%
Year 2 you'd make 14.9%
Year 3 you'd make 10.9%
and so on and so forth, essentially the annual amount you make decreased every year.
I'll have to do some maths to determine how long it would take for the Lifetime ISA to be less beneficial than alternative investments.
Hope this makes sense to you all.
Indeed, it works out that LISA, if only accounting for the 25% top up,
is equal to between almost 0 to 5% annual growth for long term (>10 yr), depending how long you keep it for. the longer you keep it, the less effective interest rate it is. Imagine that you are 49 and just keep it for 1 year, you basically get 25% interest.0 -
Hi all,
I'm 36 and considering opening a LISA to save for my baby daughters future. I already own a property, so don't qualify on that front, and I'm a member of my employers pretty generous Defined Benefit pension scheme; so don't believe I need a LISA for additional retirement benefits.
My intention is to put £2k-£3k in per year, most likely in a Stocks and Shares LISA, and at 60 (my daughter would be 24) be in a position to withdraw the money to put a sizeable deposit on a property for her/clear her university debt/whatever other reasonable large expenditure I can't currently think of.
Is this a reasonable thing to do? Are there better alternative products I could use instead? Essentially, can anyone think of any reason/s not to use a LISA for this purpose?
Thanks in advance for your responses.0
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