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  • FIRST POST
    • MSE Helen Saxon
    • By MSE Helen Saxon 16th Mar 16, 5:06 PM
    • 75Posts
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    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 36
    • Somerset La La La
    • By Somerset La La La 9th Jun 17, 9:04 PM
    • 383 Posts
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    Somerset La La La
    Thanks, that's good to hear.

    I don't trust banks and their technology - after Barclays made an almighty ***k-up transferring my H2B ISA last year.

    As the date is passed in the backend process as you say, hopefully nothing like that would happen again!!

    Due to Skipton's possible 'no transfer' clause, I'll move my H2B ISA ASAP too I think!!
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    • Arthurian
    • By Arthurian 10th Jun 17, 9:17 AM
    • 612 Posts
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    Arthurian
    As the previous poster has correctly pointed out, the Forester LISA isn't a cash one (which is the context of the comment about not holding breath) - a quick look at the online key facts and brochure reveals info about annual charges of no less than 1.25% but nothing about "1.75% annual interest rate bonus", where did you see this?
    Originally posted by eskbanker
    I don't know how Chris Dean found out, but I couldn't see it written anywhere either, so I phoned them and was told it's the same rate as their NISA, which is currently 1.75%, so that's what it'll be for the LISA this year.
    • LuxLuke
    • By LuxLuke 10th Jun 17, 11:58 AM
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    LuxLuke
    I've just given Skipton a call to ask about their clause on stopping Help to Buy transfers, and the lady I spoke assured me that they would only ever use that clause under extreme circumstances. When I asked what were considered extreme circumstances, she said if you'd done something wrong like open two lifetime ISAs or invested over your £4000 limit for the year somehow. It would be nice to have that in writing on their site, but it doesn't sound like it's actually going to be a problem.

    I'm going to risk it and try and get an extra £170 in interest out of my H2B before transferring, wish me luck!
    • Ed-1
    • By Ed-1 10th Jun 17, 12:16 PM
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    Ed-1
    I've just given Skipton a call to ask about their clause on stopping Help to Buy transfers, and the lady I spoke assured me that they would only ever use that clause under extreme circumstances. When I asked what were considered extreme circumstances, she said if you'd done something wrong like open two lifetime ISAs or invested over your £4000 limit for the year somehow. It would be nice to have that in writing on their site, but it doesn't sound like it's actually going to be a problem.

    I'm going to risk it and try and get an extra £170 in interest out of my H2B before transferring, wish me luck!
    Originally posted by LuxLuke
    You could always transfer your LISA to another LISA that allows H2B ISA transfers if Skipton ever did pull the option.
    • LuxLuke
    • By LuxLuke 10th Jun 17, 4:48 PM
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    LuxLuke
    You could always transfer your LISA to another LISA that allows H2B ISA transfers if Skipton ever did pull the option.
    Originally posted by Ed-1
    If anymore become available that is!
    • ryan121
    • By ryan121 10th Jun 17, 6:55 PM
    • 108 Posts
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    ryan121
    I'm planning to buy a house with my brother so was thinking we should both get a LISA. He is in the army though and I'm wondering about the rule where the house has to be your main residence as he mainly lives in army accommodation.

    Would that likely be an issue?

    Found the answer on a government website:

    "If you are a Crown servant, such as a member of the armed forces serving overseas (or are their spouse or civil partner) and you intend to use the property as your main residence, then you will be eligible for the scheme even if you are unable to live in it as your main home when you first purchase it. When you first purchase your property, you will be able to rent it out until you are able to move in."

    Thought it would be strange for a government scheme like this to penalise members of the army for something they have no control over.
    Last edited by ryan121; 11-06-2017 at 1:07 AM.
    • Killing Position
    • By Killing Position 11th Jun 17, 11:44 PM
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    Killing Position
    I have a help to buy ISA and a Nutmeg lifetime ISA. If I deposit £200 per month into my help to buy ISA and make ten deposits this tax year, that £2000 will gain some interest, let's call it £20. If I transfer the entire balance of my help to buy ISA into my lifetime ISA in March, will this year's contributions towards my lifetime ISA allowance be £2000 (the amount I deposited into my help to buy ISA this year) or £2020 (the amount I deposited plus interest)?
    • Ed-1
    • By Ed-1 12th Jun 17, 8:15 AM
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    Ed-1
    i have a help to buy isa and a nutmeg lifetime isa. If i deposit £200 per month into my help to buy isa and make ten deposits this tax year, that £2000 will gain some interest, let's call it £20. If i transfer the entire balance of my help to buy isa into my lifetime isa in march, will this year's contributions towards my lifetime isa allowance be £2000 (the amount i deposited into my help to buy isa this year) or £2020 (the amount i deposited plus interest)?
    Originally posted by killing position
    £2,020........
    • Somerset La La La
    • By Somerset La La La 12th Jun 17, 9:07 AM
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    Somerset La La La
    Yea be careful on the forms... I'm not sure how friendly Skipton will be...

    They ask what was deposited this tax year... so for most, at this point, that'll be £400 (May & June... if you deposit on 1st of month).... but my figure was something like £412 because of the interest

    There is a term that says something along the lines of the transfer will be blocked if it exceeds your self declared figure.

    So in theory if you put £400, and it's £412, they'd reject it... so make sure you include all interest credited in this tax year.

    I'm planning to buy a house with my brother so was thinking we should both get a LISA. He is in the army though and I'm wondering about the rule where the house has to be your main residence as he mainly lives in army accommodation.

    Would that likely be an issue?

    Found the answer on a government website:

    "If you are a Crown servant, such as a member of the armed forces serving overseas (or are their spouse or civil partner) and you intend to use the property as your main residence, then you will be eligible for the scheme even if you are unable to live in it as your main home when you first purchase it. When you first purchase your property, you will be able to rent it out until you are able to move in."

    Thought it would be strange for a government scheme like this to penalise members of the army for something they have no control over.
    Originally posted by ryan121
    I've looked at quite a lot of mortgage lending criteria - Armed Forces & Crown Employees are normally exempt from residency rules for that reason.

    As long as you live in the house you should be fine... I'd declare it so they/you don't have any surprises along the line, but I imagine it'll go through just like any other app

    N.B - technically speaking LISA bonus is a declaration made via your solicitor.... it's lender residency requirements that are more likely to be a problem (but as above, I can see pretty much all of them saying it's fine)
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    • Killing Position
    • By Killing Position 12th Jun 17, 1:41 PM
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    Killing Position
    Great, thanks for your replies. So is it only the full balance in my help to buy ISA on 5th April 2017 that can be transferred to my lifetime ISA without affecting my lifetime ISA allowance or would any interest accrued by that date (but not paid until the anniversary of me opening the account) also be included?
    • Ed-1
    • By Ed-1 12th Jun 17, 2:50 PM
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    Ed-1
    Great, thanks for your replies. So is it only the full balance in my help to buy ISA on 5th April 2017 that can be transferred to my lifetime ISA without affecting my lifetime ISA allowance or would any interest accrued by that date (but not paid until the anniversary of me opening the account) also be included?
    Originally posted by Killing Position
    Any interest accrued as at 5th April 2017 can also be transferred without affecting the LISA allowance.
    • movilogo
    • By movilogo 13th Jun 17, 9:16 AM
    • 2,260 Posts
    • 1,535 Thanks
    movilogo
    I opened a LISA on Skipton.

    [1] I can transfer £4000 now.
    [2] I can transfer later in the year, say in December 2017.

    In both [1] & [2], shall I get same £1000 or amount will be reduced in case of [2] as I don't pay the deposit upfront?
    Happiness is buying an item and then not checking its price after a month to discover it was reduced further.
    • Somerset La La La
    • By Somerset La La La 13th Jun 17, 10:55 AM
    • 383 Posts
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    Somerset La La La
    Assuming your deposit is cash, and so you not reliant on a transfer (which Skipton may pull at any time), you are better off paying in as late into this tax year as you can (i.e. March).

    You'll technically get slightly less with 2, as it won't accrue interest @ 0.5%, but if it's in account earning more than that now, do the latter.

    The bonus will be the same either way.

    It's paid monthly from 2018/19 tax year - so THEN it'd be worthwhile depositing ASAP to get compound interest on the bonus amount. For 17/18, deposit as late as you can get away with.
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    • eskbanker
    • By eskbanker 13th Jun 17, 11:44 AM
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    eskbanker
    It's paid monthly from 2018/19 tax year - so THEN it'd be worthwhile depositing ASAP to get compound interest on the bonus amount.
    Originally posted by Somerset La La La
    Not really, given Skipton's derisory interest rate - a 0.5% return on £5000 will be lower than (say) 1% on £4000 for the same period so in these circumstances it'll actually make sense to leave the LISA money elsewhere for as long as possible before paying it in late in the tax year again (or shortly before it's needed for property purchase).
    • Somerset La La La
    • By Somerset La La La 13th Jun 17, 1:25 PM
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    Somerset La La La
    Not really, given Skipton's derisory interest rate - a 0.5% return on £5000 will be lower than (say) 1% on £4000 for the same period so in these circumstances it'll actually make sense to leave the LISA money elsewhere for as long as possible before paying it in late in the tax year again (or shortly before it's needed for property purchase).
    Originally posted by eskbanker
    Should've added.... if you're putting it anywhere with a decent interest rate anyway

    Hopefully other providers will offer better rates towards the end of the tax year that would make it worthwhile depositing monthly from April onwards. Otherwise like you say, it's very much down to individual preference of what they could make elsewhere, do they want to multiple accounts etc.

    I think Skipton have had to factor in all the requests to process transfers in etc - plus money laundering checks etc etc on the influx of new customers, so sadly I guess 0.5% is probably about right for a non-competitive market.
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    • Ed-1
    • By Ed-1 13th Jun 17, 1:51 PM
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    Ed-1
    Should've added.... if you're putting it anywhere with a decent interest rate anyway

    Hopefully other providers will offer better rates towards the end of the tax year that would make it worthwhile depositing monthly from April onwards. Otherwise like you say, it's very much down to individual preference of what they could make elsewhere, do they want to multiple accounts etc.

    I think Skipton have had to factor in all the requests to process transfers in etc - plus money laundering checks etc etc on the influx of new customers, so sadly I guess 0.5% is probably about right for a non-competitive market.
    Originally posted by Somerset La La La
    No-one's going to offer anything significantly above 0.5% now that Skipton have set that 'baseline'. It's a dead market.

    When Help to Buy ISAs were launched no-one knew what sort of rates other providers would be offering so Halifax pitched in at 4%. This forced Santander to up their rate to 4%. Not going to happen with the LISA. The initial launch is key to a well functioning market and it wasn't managed properly. The change of Treasury team last year mid-way through policy development didn't help things either.
    • ajg_xiv
    • By ajg_xiv 13th Jun 17, 2:10 PM
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    ajg_xiv
    Skipton confusion
    Hi - I have CTRL+F'd all 36 pages without finding a relevant search term, nevertheless apologies if this has already been addressed.

    When reading through the Skipton overview section entitled "What might my Lifetime ISA be worth when I am age 60?" there is a table which I cannot make any sense of. In particular column 4 "4. Estimated outcome at age 60 from 0% return" which shows amounts at roughly 50% of the total saved plus the governement 25%. Please could somebody explain this?

    I was under the impression that the formula for calculating savings in a LISA is (assuming max saved each year and ignoring miserly interest rates for simplicity):

    £4,000 x 1.25 x years saved

    Then, once you need the money towards a deposit/once you hit 60, the money can be accessed tax-free towards either of those things.

    Column 4 is somewhat offputting if the money ends up worth ~50% of total savings+contribution;
    Column 5 is intriguing but again totally unclear.

    Thanks in advance for any help, after weeks of waiting I just want to get one opened to get it over and done with!
    • eskbanker
    • By eskbanker 13th Jun 17, 2:34 PM
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    eskbanker
    Those Skipton figures are accompanied by the explanation "The estimated figures in columns 4 and 5 are based on standardised rates of return, which may not reflect actual or expected returns for your choice of investment for a Lifetime ISA, and include the effect of inflation. They are not based on the rate of interest offered." plus a reference to an assumed 2.5% inflation rate.

    So, the negative outcome in column 4 is modelled on zero interest and 2.5% inflation reducing the 'real terms' value of the pot, i.e. assuming no interest then column 3 is what would actually be in the pot but its effective spending value would be reduced by inflation to that in column 4.

    It's arguably confusing but is actually quite an effective way of demonstrating that cash-based products (especially with poor interest rates) are hopeless for long-term use! So, if you want to use a LISA for accumulation for retirement, look towards investment products instead....
    • 29davidjones
    • By 29davidjones 13th Jun 17, 2:46 PM
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    29davidjones
    I'm sorry if this has already been answered but can someone help me please?

    I currently have £4,245 in my Nationwide Help-to-Buy ISA and £100 in a Nutmeg Stocks & Shares LISA which I opened on the 6th April 2017 to start the clock ticking as per Martin Lewis' advice.

    I want to open the Skipton cash LISA and transfer all the funds into that so can I do the following;

    - Open Skipton cash LISA
    - Transfer the max amount into the help-to-buy from my Nationwide Help-to-Buy.
    - Continue to save in a normal savings account.
    - As soon as the next tax year starts in 2018, put another £4000 lumper in there into the Skipton to use as a house deposit.

    My questions are;

    1) Can I transfer from Nutmeg LISA to Skipton Lisa AND Nationwide Help-to-Buy to Skipton ISA?
    2) Can I transfer the full amount or only £4000?
    3) When the new tax year starts, can I put another £4000 lump sum in there straight away?
    4) If I then wanted to buy a house in, say, May or June 2018 - would I get the full £2k bonus?

    Thanks in advance.
    • Ed-1
    • By Ed-1 13th Jun 17, 3:29 PM
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    Ed-1
    My questions are;

    1) Can I transfer from Nutmeg LISA to Skipton Lisa AND Nationwide Help-to-Buy to Skipton ISA?
    Originally posted by 29davidjones
    Yes.

    2) Can I transfer the full amount or only £4000?
    Originally posted by 29davidjones
    The balance of the Help to Buy ISA plus interest accrued as at 5th April 2017 can be transferred on top of £4,000.

    3) When the new tax year starts, can I put another £4000 lump sum in there straight away?
    Originally posted by 29davidjones
    Yes.

    4) If I then wanted to buy a house in, say, May or June 2018 - would I get the full £2k bonus?
    Originally posted by 29davidjones
    The bonus is paid into the LISA at the start of the next tax year and the month after you pay in following that.
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