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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 46
    • apinner
    • By apinner 21st Aug 17, 7:07 PM
    • 2 Posts
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    apinner
    Yes, the LISA allowances, like other ISAs (except HTB), are annual, so theoretically you can pay in the full annual allowance of £4K on the last day of one tax year and then again on the first day of the next tax year, so yes, you can pay in another £4K on 6 April 2018.

    LISA bonuses are being handled as an annual process for 2017/18 and will be paid in late April or maybe early May 2018 for 2017/18 contributions, whether these are made on 5 April 2018 or 6 April 2017.

    Once the 2018/19 tax year has started, bonuses will be paid based on contributions during monthly periods from 6th of one month to 5th of the next, so any contributions between 6 April 2018 and 5 May 2018 will receive a bonus payment of 25% of their value in late May or early June 2018.
    Originally posted by eskbanker
    So in my instance it would make far more sense to do the following:

    Now - Open up LISA with minimum contribution
    Now - Establish savings account paying better interest than the LISA

    April 5 2018 - Transfer £4,000 into LISA
    April 6 2018 - Transfer £4,000 into LISA

    In terms of receiving bonuses, if I were to engage in the above transactions I would expect them as follows:

    April 2019 - £1,000
    May 2019 - £1,000

    Then, If I were to deposit an additional £4,000 on April 6 2019 I can expect to receive the bonus the following month?

    Thanks for the help!
    • Ed-1
    • By Ed-1 21st Aug 17, 7:10 PM
    • 2,033 Posts
    • 1,094 Thanks
    Ed-1
    So in my instance it would make far more sense to do the following:

    Now - Open up LISA with minimum contribution
    Now - Establish savings account paying better interest than the LISA

    April 5 2018 - Transfer £4,000 into LISA
    April 6 2018 - Transfer £4,000 into LISA

    In terms of receiving bonuses, if I were to engage in the above transactions I would expect them as follows:

    April 20198 - £1,000
    May 20198 - £1,000

    Then, If I were to deposit an additional £4,000 on April 6 2019 I can expect to receive the bonus the following month?

    Thanks for the help!
    Originally posted by apinner
    Corrected.
    • eskbanker
    • By eskbanker 21st Aug 17, 7:18 PM
    • 5,800 Posts
    • 5,685 Thanks
    eskbanker
    Now - Open up LISA with minimum contribution
    Now - Establish savings account paying better interest than the LISA

    April 5 2018 - Transfer £4,000 into LISA
    April 6 2018 - Transfer £4,000 into LISA
    Originally posted by apinner
    Just a couple of minor points - even though you could indeed pay into your LISA on the very last day of the tax year, it would be prudent to do so a few days earlier just to be on the safe side, given the 'use it or lose it' nature of the annual allowance.

    Also, since you have to make a minimal contribution when opening the LISA, the year-end payment needs to be £4K minus the opening contribution....
    • slnwrd
    • By slnwrd 23rd Aug 17, 8:05 PM
    • 1 Posts
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    slnwrd
    We currently have HTB ISAs, but where we live (outside of London) the 250K limit buys nothing. We were looking to open the lifetime ISA instead and transfer our savings over but are worried what would happen if we ended up buying somewhere for >450k - with the rate prices have gone up in recent years this is not implausible. As I understand it we could then end up losing some of our savings (or they'd be stuck until we're 60!). Am I correct in thinking this?
    • eskbanker
    • By eskbanker 23rd Aug 17, 8:22 PM
    • 5,800 Posts
    • 5,685 Thanks
    eskbanker
    Yes, the three options for LISA contents are:
    1. Use for a first-time property purchase up to £450K
    2. Don't withdraw until after 60
    3. Pay a penalty of 25% of amount withdrawn for any other reason
    • GavinMal
    • By GavinMal 25th Aug 17, 1:36 PM
    • 1 Posts
    • 0 Thanks
    GavinMal
    Hello all,

    I opened a Nutmeg Stocks and Shares LISA at the first available opportunity this tax year. I am now looking to transfer that into Skipton’s LISA.

    However, after completing all the documentation Skipton have told me that it is not possible to transfer my Nutmeg LISA in without opening a new account with Skipton and then transferring in.

    Of course, this would re-start the clock on me needing to hold the account for one year before using any of the monies so I do not want to open a new account with Skipton.

    Has anyone else had a similar experience transferring a S&S LISA into Skipton’s Cash LISA?

    Thanks,

    Gavin

    (As an extra thought, I was wondering if I transfer my H2B ISA to the Cash LISA at Skipton, I may have more joy that way?)
    • Ed-1
    • By Ed-1 25th Aug 17, 5:22 PM
    • 2,033 Posts
    • 1,094 Thanks
    Ed-1
    Hello all,

    I opened a Nutmeg Stocks and Shares LISA at the first available opportunity this tax year. I am now looking to transfer that into Skiptonís LISA.

    However, after completing all the documentation Skipton have told me that it is not possible to transfer my Nutmeg LISA in without opening a new account with Skipton and then transferring in.

    Of course, this would re-start the clock on me needing to hold the account for one year before using any of the monies so I do not want to open a new account with Skipton.

    Has anyone else had a similar experience transferring a S&S LISA into Skiptonís Cash LISA?

    Thanks,

    Gavin

    (As an extra thought, I was wondering if I transfer my H2B ISA to the Cash LISA at Skipton, I may have more joy that way?)
    Originally posted by GavinMal
    It wouldn't restart the clock. It goes from the date of the first opened LISA.
    • andy013
    • By andy013 7th Sep 17, 12:56 AM
    • 101 Posts
    • 364 Thanks
    andy013
    Does anyone else think that the MSE article on this is slightly biased to favor HL over YouInvest?

    In the article they state about YouInvest :

    One thing to watch out for is that this LISA could have high transfer fees. It charges a £25 fee per holding to transfer to a new provider - fine if you're in one fund, but potentially expensive if you've several different funds or share holdings.
    and for HL they say:

    HL has a relatively low charge to transfer out - good if you think you'll want to move providers to chase the best deals as they come along.
    Yet HL also charges £25 per holding to transfer to another provider. It also seems to have an additional £25 charge on top of this (an account closure fee). They also charge £25 if you want to transfer in cash, whereas YouInvest will do this for free. By all accounts YouInvest is either cheaper or equivalent to HL and that's not even looking at the platform fee!

    Here are the 2 pages for you to compare yourself: Hargreaves (check under account administration and transfers) and YouInvest

    I guess because MSE don't get referral money from YouInvest they are favoring HL. Naughty, naughty!

    [EDIT] Looks like they updated the article. Perhaps it was just an oversight but HL never had low fees to transfer out AFAIK.
    Last edited by andy013; 12-09-2017 at 1:32 AM.
    • 1davidmprice
    • By 1davidmprice 7th Sep 17, 9:56 AM
    • 1 Posts
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    1davidmprice
    What happens if too much in Lifetime ISA
    Hi all,

    Does anyone know what will happen if there is more than is needed for a house deposit in a lifetime ISA i.e. more than a 7% of deposit cost as I understand it deposits are only calculated in 5% multiples. Would you have to transfer out the exact amount and leave the rest in the account?

    Thanks
    • pphillips
    • By pphillips 7th Sep 17, 12:40 PM
    • 229 Posts
    • 186 Thanks
    pphillips
    A lifetime ISA can be used towards your first home or retirement. Therefore, any surplus that is not used towards your first home will stay locked in the lifetime ISA until you turn 60 (unless you die before then or become terminally ill).
    • eskbanker
    • By eskbanker 7th Sep 17, 1:03 PM
    • 5,800 Posts
    • 5,685 Thanks
    eskbanker
    Does anyone know what will happen if there is more than is needed for a house deposit in a lifetime ISA i.e. more than a 7% of deposit cost as I understand it deposits are only calculated in 5% multiples. Would you have to transfer out the exact amount and leave the rest in the account?
    Originally posted by 1davidmprice
    The multiples of 5% is news to me but I haven't bought a property or taken out a mortgage for a long time!

    However, the LISA funds can be used for both the exchange deposit and the mortgage deposit (the same word is confusingly used for both, but see the MSE explanation of the difference), so you will be able to use all of your LISA money towards your property purchase if you want to, one way or another - your conveyancer and/or mortgage broker will help you through this.

    Also, according to some seemingly well-informed posters on the mortgages board, some conveyancers happily turn a blind eye to the rule that HTB (and presumably LISA when applicable) funds can't be used for stamp duty or legal fees and simply put the proceeds towards the overall completion statement without applying strict differentiation as to exactly how they're actually allocated....
    • SeduLOUs
    • By SeduLOUs 7th Sep 17, 6:13 PM
    • 2,091 Posts
    • 2,476 Thanks
    SeduLOUs
    Hi all,

    Does anyone know what will happen if there is more than is needed for a house deposit in a lifetime ISA i.e. more than a 7% of deposit cost as I understand it deposits are only calculated in 5% multiples. Would you have to transfer out the exact amount and leave the rest in the account?

    Thanks
    Originally posted by 1davidmprice
    I'm using a deposit of £40k on a £124k house. My HTB ISA balance is £4978.83 and I'm using it all expecting a bonus of £1244.71. There are no round numbers of multiples of 5% in my purchase!

    I suspect you will be able to use as little or as much of your LISA balance as you choose. It would seem odd to have a deposit that wasn't a round number, but that doesn't necessarily mean it would be an issue.
    • jerry2604
    • By jerry2604 8th Sep 17, 6:04 PM
    • 2 Posts
    • 0 Thanks
    jerry2604
    LISA - can it be used for both?
    My daughter has a Help to buy ISA and will open a LISA near to the end of the tax year and transfer it across.

    However with the LISA, are you able to use it's full value. including the govt bonus at the time of property purchase and still continue to pay into it to get the retirement element bonus at retirement age. Or once used for property purchase is it automatically closed; or does it revert to a standard type ISA with no bonus?

    Thanks in advance
    • cjv
    • By cjv 10th Sep 17, 11:54 PM
    • 106 Posts
    • 57 Thanks
    cjv
    Holding a S&S and a Cash LISA
    Could anyone tell me if this is within the rules please?

    I currently pay in to a Nutmeg S&S LISA.

    In year 2 could I open a Cash LISA and pay into that (not paying anything into the Nutmeg LISA that year) and then in year 3 only pay into my Nutmeg LISA again. Leaving both accounts open and alternating yearly which one I pay into?

    I would probably only consider this if a better Cash LISA rate came on the market, but It will be helpful to know for the future as I could essentially hold 50/50 of my contributions in Cash/S&S

    Thanks
    • Ed-1
    • By Ed-1 10th Sep 17, 11:57 PM
    • 2,033 Posts
    • 1,094 Thanks
    Ed-1
    Could anyone tell me if this is within the rules please?

    I currently pay in to a Nutmeg S&S LISA.

    In year 2 could I open a Cash LISA and pay into that (not paying anything into the Nutmeg LISA that year) and then in year 3 only pay into my Nutmeg LISA again. Leaving both accounts open and alternating yearly which one I pay into?

    I would probably only consider this if a better Cash LISA rate came on the market, but It will be helpful to know for the future as I could essentially hold 50/50 of my contributions in Cash/S&S

    Thanks
    Originally posted by cjv
    Yes fine...
    • cjv
    • By cjv 11th Sep 17, 12:21 AM
    • 106 Posts
    • 57 Thanks
    cjv
    Yes fine...
    Originally posted by Ed-1
    Cool thanks
    • El Bubba
    • By El Bubba 19th Sep 17, 10:41 AM
    • 1 Posts
    • 0 Thanks
    El Bubba
    Hello,

    Please can anyone answer the below questions. Sorry about the rush. I need to be more organised.
    Sorry.


    I am turning 40 very soon and not a first time buyer. I cannot really invest in any shares in the next couple of years as I am saving up to buy a house (again). I cannot really take any risks with the savings I have as a result.


    If I open a cash LISA with Skipton BS, can I later on transfer this to a shares LISA such as AJ Bell a few years later?



    Also, when I have a shares LISA, am I OK to sell shares as long as I don't withdraw the money?

    Sorry if I am a bit thick. Thanks in advance for your advice.
    Last edited by El Bubba; 19-09-2017 at 10:53 AM.
    • funguy
    • By funguy 19th Sep 17, 10:51 AM
    • 518 Posts
    • 802 Thanks
    funguy
    Hi All,

    If considering a LISA from a pension point of view, should i look to put the money into the Nutmeg S+S or Skipton cash LISA?

    I already have a pension through work that i cannot contribute anymore to.
    Thank you in advance
    • Alexland
    • By Alexland 20th Sep 17, 2:12 PM
    • 670 Posts
    • 421 Thanks
    Alexland
    @ElBubba as you will not qualify as a first time buyer why not skip the Cash LISA and just open a S&S LISA for saving for 60+? You wouldn't want to use a LISA to save up for another house as you would loose the bonus and suffer a small withdrawal penalty.

    Nutmeg will open a LISA with 100 pounds which will build you a diversified investment portfolio. You just need to tell them your risk level and they will choose investments that suit your volatility tolerance. The best way to get experience in investing is to start with a small amount.

    On low adhoc or regular amounts Nutmeg should be cheaper than AJ Bell as there are no trading costs. It's also simpler as their fees are automatically deducted from the invested units which also means whatever you have in the account is totally invested.

    AJ Bell will be best for large lump sum amounts or after a few years when the LISA is large. On AJ Bell (or Hargreaves Lansdown) you have to choose your own funds such as Vanguard Life Strategy 60 and maintain a small cash balance to pay platform fees.

    Finally having had accounts with both Nutmeg and AJ Bell the customer service at Nutmeg is so much better. Netmeg always reply to secure messages within 24 hours but AJ Bell take lots of chasing for even simple things.

    P.s. yes you can hold cash and buy and sell in a LISA wrapper (on AJ Bell and HL) without withdrawing but Nutmeg require you to be continually invested in a portfolio (which you can switch).
    Last edited by Alexland; 20-09-2017 at 2:33 PM.
    • Alexland
    • By Alexland 20th Sep 17, 2:16 PM
    • 670 Posts
    • 421 Thanks
    Alexland
    @funguy a S&S LISA would beat a Cash LISA in most circumstances for 20+ years of accumulation. However an employer pension is usually better than both.
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