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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 havenít already, join the forum to reply. If you arenít sure how it all works, read our New to Forum? Intro Guide.


    Thanks folks,
Page 11
    • Midcrisislife
    • By Midcrisislife 8th Mar 17, 9:44 AM
    • 4 Posts
    • 0 Thanks
    Midcrisislife
    Had a good chat with the nephew on this and yes looks good but I don't think a 19yr old should start one up if there is a chance he'll be tapping it later for travel or cars. I think a tracker ISA is a good idea to kick off with then transfer to this later on when the mind is calmer and the energy lesser.

    Other side of the coin is that the govt might pull it if oversubscribed or the Chancellor has second thoughts.
    • veryintrigued
    • By veryintrigued 8th Mar 17, 7:30 PM
    • 1,934 Posts
    • 1,183 Thanks
    veryintrigued
    Cant see any changes within today's budget on this.

    Stand by your beds for any institution ready to launch...
    • Tyrone Black
    • By Tyrone Black 8th Mar 17, 7:32 PM
    • 108 Posts
    • 252 Thanks
    Tyrone Black
    Disappointing to not hear a word of this today. Banks clearly wasn't no part of it.
    • darren72
    • By darren72 8th Mar 17, 7:32 PM
    • 948 Posts
    • 172 Thanks
    darren72
    Cant see any changes within today's budget on this.

    Stand by your beds for any institution ready to launch...
    Originally posted by veryintrigued
    Is there a list anywhere of which institutions have said they will launch a Lifetime ISA ? - I can only recall Hargreaves Lansdown being mentioned at one point.
    • veryintrigued
    • By veryintrigued 8th Mar 17, 7:37 PM
    • 1,934 Posts
    • 1,183 Thanks
    veryintrigued
    Is there a list anywhere of which institutions have said they will launch a Lifetime ISA ? - I can only recall Hargreaves Lansdown being mentioned at one point.
    Originally posted by darren72
    That's probably almost the list at the moment

    Fingers crossed institutions are now ready to break cover!
    • silvercar
    • By silvercar 8th Mar 17, 7:40 PM
    • 35,257 Posts
    • 148,776 Thanks
    silvercar
    I'm confused whether to transfer existing HTB ISA to LISA if I'm worried that the price of the first property will be over 450k. If the areas you are looking to buy are already at a really high level, is it worth transferring if the first property is unlikely to fit the criteria?
    • bowlhead99
    • By bowlhead99 8th Mar 17, 7:59 PM
    • 6,401 Posts
    • 11,332 Thanks
    bowlhead99
    I'm confused whether to transfer existing HTB ISA to LISA if I'm worried that the price of the first property will be over 450k. If the areas you are looking to buy are already at a really high level, is it worth transferring if the first property is unlikely to fit the criteria?
    Originally posted by silvercar
    If the place is over £450k then the HTB is no use to you anyway.

    If you aren't gong to buy for at least a year, probably no real harm in transferring into a LISA some point this coming tax year and then closing it down before end of March 2018 if it becomes obvious that you are simply not going to be able to get the property you want for under the £450k.

    If you leave it until April 2018 or beyond (basically, whenever the first bonus is due to be assessed and credited), then you would suffer a penalty when withdrawing the funds for a non-qualifying purpose. If you close it down before that point, they won't seek to penalise you because you haven't had a bonus anyway.
    • RyanEzio
    • By RyanEzio 8th Mar 17, 8:28 PM
    • 36 Posts
    • 41 Thanks
    RyanEzio
    Judging by the Tory Government's policies. It wouldn't surprise me if they scrap the Lifetime ISA's in a couple of years.
    Ryan
    • silvercar
    • By silvercar 9th Mar 17, 8:08 AM
    • 35,257 Posts
    • 148,776 Thanks
    silvercar
    If the place is over £450k then the HTB is no use to you anyway.

    If you aren't gong to buy for at least a year, probably no real harm in transferring into a LISA some point this coming tax year and then closing it down before end of March 2018 if it becomes obvious that you are simply not going to be able to get the property you want for under the £450k.

    If you leave it until April 2018 or beyond (basically, whenever the first bonus is due to be assessed and credited), then you would suffer a penalty when withdrawing the funds for a non-qualifying purpose. If you close it down before that point, they won't seek to penalise you because you haven't had a bonus anyway.
    Originally posted by bowlhead99
    Thank you for this.

    If I leave the money in HTB ISA would the bonus be added before I needed the money?
    • Sebrof89
    • By Sebrof89 9th Mar 17, 10:48 AM
    • 9 Posts
    • 42 Thanks
    Sebrof89
    After the message about transferring to a new product called a Lifetime ISA appeared on the Halifax and Bank of Scotland websites I asked if and when they will be offering this product. The exact response I got was "We don't currently offer this account & don't have any plans to do so".

    I presume the message on their respective websites is aimed at customers transferring out of their Halifax/BoS HTB ISA to somewhere that actually is offering the LISA.

    S89
    • juniordoc
    • By juniordoc 10th Mar 17, 1:00 PM
    • 102 Posts
    • 62 Thanks
    juniordoc
    Does anyone think this rule that you have to have had a LISA for one year in order to claim the bonus will result in a rush of people wanting to buy in April 18 who have been building their HTB/LISAs?
    I can't really understand the rationale behind this rule either, particularly for those who have a HTB ISA balance to transfer into the LISA.....
    Any thoughts?
    • masonic
    • By masonic 10th Mar 17, 1:05 PM
    • 9,126 Posts
    • 6,271 Thanks
    masonic
    Does anyone think this rule that you have to have had a LISA for one year in order to claim the bonus will result in a rush of people wanting to buy in April 18 who have been building their HTB/LISAs?
    I can't really understand the rationale behind this rule either, particularly for those who have a HTB ISA balance to transfer into the LISA.....
    Any thoughts?
    Originally posted by juniordoc
    I don't think people will wait another year to gain an extra £1000 from the Government. The price of a house could easily go up by several thousand while they wait. Many people would have to continue paying rent while waiting too.
    • darren72
    • By darren72 10th Mar 17, 1:07 PM
    • 948 Posts
    • 172 Thanks
    darren72
    So is it only Hargreaves Lansdown and Nutmeg that have said they will be launching the lifetime ISA's ?
    • masonic
    • By masonic 10th Mar 17, 1:13 PM
    • 9,126 Posts
    • 6,271 Thanks
    masonic
    So is it only Hargreaves Lansdown and Nutmeg that have said they will be launching the lifetime ISA's ?
    Originally posted by darren72
    There are plenty of others who have said they will be launching one, just not in time for the new tax year.

    As well as the two you've mentioned, the expensive MoneyBox investing app will also have a LISA in place for the new tax year - not that anyone should use it.
    • Ashley fletcher
    • By Ashley fletcher 12th Mar 17, 10:48 AM
    • 2 Posts
    • 1 Thanks
    Ashley fletcher
    Barclays
    I spoke to Barclays yesterday, they confirmed they will be opening a LISA, however, no date was given, nor the interest rate.
    • Ashley fletcher
    • By Ashley fletcher 12th Mar 17, 10:52 AM
    • 2 Posts
    • 1 Thanks
    Ashley fletcher
    I just want to clarify the lifetime ISA, if someone can help me.
    So the lifetime ISA, can be used for your first time property, with the added 25% of your savings. PLUS, once that money has been withdrawn for your first deposit, you can continue to pay into the account until you turn 50. And once you turn 60, you can withdraw the savings and receive another 25% bonus? Is this correct? Or do you only receive one 25% bonus?

    Thanks
    • masonic
    • By masonic 12th Mar 17, 11:33 AM
    • 9,126 Posts
    • 6,271 Thanks
    masonic
    That's correct. The bonus is applied to all of your contributions.
    • jtodd
    • By jtodd 12th Mar 17, 4:24 PM
    • 2 Posts
    • 0 Thanks
    jtodd
    Hi there,

    Just had a few questions/clarifications/opinions required:

    Firstly, suppose I open a Help-to-Buy and I deposit £1,200 into it today and then £200 on April 1st and I correct in assuming I would be able to have a LISA limit for the 2017-2018 of £5,400 plus small amount of interest I receive from the help to buy ISA?

    Would the government cash bonus be £1,350 or still just the £1,000?

    The government bonus is then paid monthly after year, so are you saying that if I deposited £4,000 at the beginning of the 2018-19 tax year I would then receive a £83.33 government monthly bonus?

    Also, from my perspective as I’m only 21 I imagine I would only use the LISA for a house deposit so is not supposing that the purchase of a house is a good investment decision (purely from a financial perspective?) Are house prices going to continue to rise forever?

    Hypothetically, could I use LISA on deposit and then immediately sell the house again and simply gain the cash?

    Likewise I’m fairly young so my expected salary won’t be that high is it wise to put my marginal savings into a LISA that has fairly high withdrawal costs? Obviously I will keep a small rainy day pot
    • masonic
    • By masonic 12th Mar 17, 5:39 PM
    • 9,126 Posts
    • 6,271 Thanks
    masonic
    Firstly, suppose I open a Help-to-Buy and I deposit £1,200 into it today and then £200 on April 1st and I correct in assuming I would be able to have a LISA limit for the 2017-2018 of £5,400 plus small amount of interest I receive from the help to buy ISA?

    Would the government cash bonus be £1,350 or still just the £1,000?
    Originally posted by jtodd
    You will get the bonus on the full amount of money paid in, including what has been transferred from the HTB ISA, so £1,350.

    The government bonus is then paid monthly after year, so are you saying that if I deposited £4,000 at the beginning of the 2018-19 tax year I would then receive a £83.33 government monthly bonus?
    My understanding is you'll get a £1000 bonus within a month or so of depositing the £4000.

    Also, from my perspective as I’m only 21 I imagine I would only use the LISA for a house deposit so is not supposing that the purchase of a house is a good investment decision (purely from a financial perspective?) Are house prices going to continue to rise forever?
    Usually it makes more sense (both financially and in terms of security of tenure) to buy a home and live in it rather than renting a home from a landlord. That isn't true in every case, or buying may not be realistic if you live in an area where property is unafforable.

    What happens to house prices in the future is largely irrelevant, because the primary objective here is to own something that is potentially more expensive to rent over the long term. Any above inflation house price rises are the icing on the cake. House prices can also fall and take a long time to recover.

    Hypothetically, could I use LISA on deposit and then immediately sell the house again and simply gain the cash?
    The rules of the scheme are not finalised yet, but you would be skating on thin ice if you bought a home fully intending not to live in it.

    Likewise I’m fairly young so my expected salary won’t be that high is it wise to put my marginal savings into a LISA that has fairly high withdrawal costs? Obviously I will keep a small rainy day pot
    For retirement savings, it is likely that a workplace pension would be the priority due to the potential for employer matching and salary sacrifice. If you have no intention of buying a home, then it may be a better move to keep the HTB ISA.
    • jtodd
    • By jtodd 12th Mar 17, 7:22 PM
    • 2 Posts
    • 0 Thanks
    jtodd
    Thank you very much for all of that!
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