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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 48
    • Alexland
    • By Alexland 3rd Oct 17, 4:43 PM
    • 427 Posts
    • 254 Thanks
    Alexland
    1) Yes although it might be May 18 depending how long the Skipton and HMRC admin takes.

    2&3) New tax year starts on 6th April 18 but otherwise yes deposit another £4k and after a bit of admin time you should get another £1k so the total is now £10k plus interest. The bonus would only be spread if your deposits were spread.

    Most of the negative coments are about the confusion they cause with pensions and the low interest rate. If you used a 5pc regular saver for 5 years it would give you a similar 25pc+ return.
    • Alexland
    • By Alexland 3rd Oct 17, 4:44 PM
    • 427 Posts
    • 254 Thanks
    Alexland
    But regular savers are fiddely and expire after a year so a LISA would be better.
    • Lingua
    • By Lingua 3rd Oct 17, 5:53 PM
    • 196 Posts
    • 207 Thanks
    Lingua
    Show me a regular saver that can accept £4000 of deposits and which has an interest rate high enough to provide 5% of return on that sum over a sustained period of five years (around 10-11%?)

    I'm wanting to use my LISA in 2020/2021, so hoping to have a good few thousand £ of bonus, but just hoping nothing changes in the interrim!
    Long-Term Goal: £14'000 / £40'000 mortgage downpayment (2020)
    • billymadbiker
    • By billymadbiker 3rd Oct 17, 9:45 PM
    • 206 Posts
    • 28 Thanks
    billymadbiker
    What's this?

    BILLYMADBIKERView public profileSend private messageFind more postsView all thanked posts

    LISA Questions..

    Hi all,
    I have just (yesterday) opened a Skipton cash LISA. This is my first isa/savings account.
    I turned 39 3 weeks ago.
    I have opened the Lisa account with £1.
    I will transfer the remaining £3999 before April 2018.

    Plan is to gain the 25% bonus to use towards a ftb house purchase in the next 3-4 years. I am self-employed so also intend to use the Lisa as my (currently only) pension savings fund.

    I have the following questions if anyone can help me out?

    1: Can I also open a ftb/htb isa today with £1000, then pay in the £200 pm until March next year and transfer the £2k into my Lisa gaining me an extra £500 bonus? (I am presuming I am unable to open a 2nd isa in this same tax year so it's a no-go?)

    2: I deposit £3999 in the Skipton Lisa March 2018. April 2018 I then deposit another £4000. So by may 18 I should have £10k in the Lisa account. I will not be able to use this for a house purchase until October 18 (as that's the 1yr the Lisa will have been open for) if I waited to buy until May 2019 I could have £15k available then? Is this correct?

    3: April 2018 - I can open a s&s LISA alongside my cash LISA?
    Can I also pay £4k into this? (So total of £8k a year)!
    Will I also attract a 25% bonus on this 2nd Lisa?
    If so, could somebody continue to open one new Lisa each tax year?
    (I realise I personally won't as I will by over 40 by 2019)
    My theory behind having the 2nd Lisa as s&s is to start using that one for my pension. If I don't end up buying a house I would transfer the funds from the cash LISA into it for longer term investment

    4: If I don't buy a house and transfer the funds from a cash lisa into a s&s LISA I presume the 25% bonus also gets transferred across and I get to keep it (withdrawable at 60)

    5: My partner is not currently working so the house purchase is intended to be in my name only (sole applicant for mortgage) If they also open a cash lisa will we be able to use the bonus from that against a property?

    Thanks in advance for any help!!
    • eskbanker
    • By eskbanker 4th Oct 17, 12:11 PM
    • 5,558 Posts
    • 5,402 Thanks
    eskbanker
    1: Can I also open a ftb/htb isa today with £1000, then pay in the £200 pm until March next year and transfer the £2k into my Lisa gaining me an extra £500 bonus? (I am presuming I am unable to open a 2nd isa in this same tax year so it's a no-go?)
    Originally posted by billymadbiker
    No, anything transferred from a HTB ISA into a LISA counts towards the £4K annual LISA limit (except for HTB contributions made before this tax year, which obviously wouldn't apply to your scenario). You could open a HTB ISA alongside a LISA but you can't claim a 25% bonus towards a house purchase on both, so the obvious choice is to use the higher amount available in a LISA.

    2: I deposit £3999 in the Skipton Lisa March 2018. April 2018 I then deposit another £4000. So by may 18 I should have £10k in the Lisa account. I will not be able to use this for a house purchase until October 18 (as that's the 1yr the Lisa will have been open for) if I waited to buy until May 2019 I could have £15k available then? Is this correct?
    Originally posted by billymadbiker
    Yes (plus a bit of interest as well as the £15K).

    3: April 2018 - I can open a s&s LISA alongside my cash LISA?
    Can I also pay £4k into this? (So total of £8k a year)!
    Will I also attract a 25% bonus on this 2nd Lisa?
    If so, could somebody continue to open one new Lisa each tax year?
    (I realise I personally won't as I will by over 40 by 2019)
    My theory behind having the 2nd Lisa as s&s is to start using that one for my pension. If I don't end up buying a house I would transfer the funds from the cash LISA into it for longer term investment
    Originally posted by billymadbiker
    You can only pay a maximum of £4K per year into LISAs, so the rest becomes irrelevant - there isn't the concept of running a 'pension LISA' alongside a 'house LISA' as two separate entities, but you probably ought to consider a proper pension anyway, see https://www.moneysavingexpert.com/savings/lifetime-ISAs#pension2 for further details.

    4: If I don't buy a house and transfer the funds from a cash lisa into a s&s LISA I presume the 25% bonus also gets transferred across and I get to keep it (withdrawable at 60)
    Originally posted by billymadbiker
    Yes.

    5: My partner is not currently working so the house purchase is intended to be in my name only (sole applicant for mortgage) If they also open a cash lisa will we be able to use the bonus from that against a property?
    Originally posted by billymadbiker
    No.
    • Lingua
    • By Lingua 4th Oct 17, 8:51 PM
    • 196 Posts
    • 207 Thanks
    Lingua
    I'm hoping to use the LISA to buy a property as soon as I finish university. My only concern is that I won't be able to find a mortgage as I'll be newly-employed :/

    It's interesting because someone who buys a property in a corporate structure can still use the LISA to buy their own home should they be buying their first property as an individual.

    Lingua
    Long-Term Goal: £14'000 / £40'000 mortgage downpayment (2020)
    • Alexland
    • By Alexland 4th Oct 17, 8:51 PM
    • 427 Posts
    • 254 Thanks
    Alexland
    Even if your partner is not working you could each have a LISA and gift them the 4k each year and buy the property jointly. It could still be a joint mortgage buying jointly using both lisas. The max loan would still be based on your income and outgoings.
    • billymadbiker
    • By billymadbiker 5th Oct 17, 9:40 AM
    • 206 Posts
    • 28 Thanks
    billymadbiker
    I don't need to gift her the money, she has enough savings to pay in £4k a year.

    I don't know if a lender would allow her to be added to a mortgage with no income though?
    Obviously if she had a Lisa she would be providing part of the deposit but not making any of the repayments.

    The t&c's of the Lisa say she would need to be buying with a mortgage to claim the bonus?
    • Lingua
    • By Lingua 5th Oct 17, 11:01 AM
    • 196 Posts
    • 207 Thanks
    Lingua
    Might be worth weighing up the benefits and the negatives. Realistically, is the bonus on the LISA going to be enough to potentially end up with a higher interest rate (paying more back over time), or require a higher deposit etc.? If it is going to make finding a mortgage harder, it might be easier to go with one LISA and use the other money as a bigger deposit, or to renovate the property to your liking.

    Lingua
    Long-Term Goal: £14'000 / £40'000 mortgage downpayment (2020)
    • Alexland
    • By Alexland 5th Oct 17, 9:27 PM
    • 427 Posts
    • 254 Thanks
    Alexland
    @billymadbiker yes your partner would need to be buying the property with you to use their LISA and most if not all lenders would need them to be named on the mortgage.

    I don't see why a lender would not allow a joint mortgage based only on your income but that might be a question for the MSE mortgage experts.

    Alex
    • Fordy51
    • By Fordy51 9th Oct 17, 7:12 PM
    • 1 Posts
    • 0 Thanks
    Fordy51
    Hi all.

    I am in a predicament.

    I have a total of £6000.

    I am looking for the best return through a help to buy scheme.

    Now i have no ISA at all. All my workings out are based on not needed the money for 12 month's
    I need clarification which isa scheme to use

    Through a help to buy isa
    Deposit £1200 now
    Monthly £200 over 12 months
    H2B ISA Total £3600 + any interest aer%
    Gov 25% = £900
    Overall Return from H2b ISA inc gov £4500 excluding the AER for examples
    Add the rest of the 6000 i couldnt deposit in £2400

    Outcome £6900

    LISA option
    Deposit £4000 now
    Monthly £167
    Total after 1 year £6000 - lets not even think about the 0.5% interest
    Gov 25% £1500

    Outcome = £7500

    From where i sit the LISA is the best option as this gains £600 over a H2B isa.
    Am i correct in these calculations or am i missing anything? I've literally only spent today looking into these ISA's
    • Alexland
    • By Alexland 9th Oct 17, 7:25 PM
    • 427 Posts
    • 254 Thanks
    Alexland
    Hi - welcome to the forum

    On what you have said the LISA sounds better for your circumstances saving up to be a first time property buyer in the near future.

    On the LISA if you contribute £4k this tax year then you will not be able to make any additional contributions until the start of the next tax year on 6th April when you can put up to another £4k in. So if you put £4k in now (or later in the tax year) and only £2k in next tax year then yes you will get a £1000 and £500 bonus so a total of £7500. If you have another £2k by then you can get a further £500 bonus to get to £10k.

    With LISAs it doesn't need to be monthly you can do lump sums whenever you want provided you don't exceed the limit in a tax year. The LISA account must be open 12 months before you can use it to buy a house.

    Alex
    Last edited by Alexland; 10-10-2017 at 1:15 PM.
    • binaryuniverse
    • By binaryuniverse 9th Oct 17, 10:45 PM
    • 408 Posts
    • 202 Thanks
    binaryuniverse
    The best return is to put that £6000 in to high interest current accounts (open the LISA with £1 now though). Let that gain as much interest as possible, until the end of March, then dump £4000 in the before the new tax year starts. Then keep the remaining £2000 gaining interest, then stick that in the LISA, when you're ready to buy.
    • Alexland
    • By Alexland 10th Oct 17, 1:16 PM
    • 427 Posts
    • 254 Thanks
    Alexland
    Just don't leave it too late in the tax year as LISA providers will be busy and there can be delays verifying identify, etc.
    • Neys
    • By Neys 12th Oct 17, 4:15 PM
    • 1 Posts
    • 0 Thanks
    Neys
    Hi everyone,

    I am in a position that I suspect a number of people may be familiar with:

    I opened a H2B ISA as soon as they became available with Halifax and have been plowing the maximum in every month. This pot is now at a handy ~£5k. I also know about the issues accessing the bonus before completion and thus...

    After umming and aahhing a bit earlier this year, I opened a LISA with Nutmeg. This choice was based on their zero transfer out fees and reasonably simple structure. At the time, I asked what the timescale was for H2B transfers and received "before the summer" as a response. That subsequently slid to "before the end of the year" and, yesterday, became:
    "I am afraid it's looking less likely that the ability to have help to buy ISA's transferred into your LISA will be happening within this tax year."

    So, I have a slight predicament: my current LISA provider is (probably) not going to be able to combine the two ISAs and I want to avoid the excruciatingly high fees charged by the other investment LISA providers. Is the Skipton LISA my only choice? Is the 0.5% interest even worth it? Finally, if I transfer my H2B ISA, will I be paid out any interest accrued or do I lose it all?

    Any and all comments and advice would be appreciated.

    Thanks!
    • eskbanker
    • By eskbanker 12th Oct 17, 6:55 PM
    • 5,558 Posts
    • 5,402 Thanks
    eskbanker
    So, I have a slight predicament: my current LISA provider is (probably) not going to be able to combine the two ISAs and I want to avoid the excruciatingly high fees charged by the other investment LISA providers. Is the Skipton LISA my only choice? Is the 0.5% interest even worth it?
    Originally posted by Neys
    As you've found, there are only a small number of LISA providers so if you're moving from Nutmeg then you need to choose between high fees or low interest. Personally I'd go with the latter, given that your capital is protected in a cash product more suited to relatively short timescales, unless you're looking at 5+ years before buying. You can always transfer it on again if/when a better deal comes up later or Nutmeg get their act together.

    Finally, if I transfer my H2B ISA, will I be paid out any interest accrued or do I lose it all?
    Originally posted by Neys
    Interest will be paid on a pro rata basis up to the date of transfer.
    • Hipperty
    • By Hipperty 14th Oct 17, 3:28 PM
    • 2 Posts
    • 1 Thanks
    Hipperty
    Hi, I plan to transfer in money from my H2B ISA into my Skipton LISA, but want to continue saving afterwards into the H2B ISA due to the better interest rate. Do I have to transfer this years contributions, so far, in full as I will be transferring during the current tax year?
    Thanks in advance for any advice.
    • eskbanker
    • By eskbanker 14th Oct 17, 6:33 PM
    • 5,558 Posts
    • 5,402 Thanks
    eskbanker
    Hi, I plan to transfer in money from my H2B ISA into my Skipton LISA, but want to continue saving afterwards into the H2B ISA due to the better interest rate. Do I have to transfer this years contributions, so far, in full as I will be transferring during the current tax year?
    Thanks in advance for any advice.
    Originally posted by Hipperty
    Yes, current year contributions need to be transferred in their entirety, as per clause 11.12a of the scheme rules:
    Where current year subscriptions are transferred they must be transferred in whole (including any related income*)
    Just to be sure, you do realise that you can't get/use the 25% bonus on both a LISA and a HTB ISA for a first-time property purchase? As you say, HTB ISA interest is often more generous than other accounts but should only be considered after filling up a LISA with £4K every year if you're not going to get the bonus on it.
    • Young_Investor
    • By Young_Investor 14th Oct 17, 8:33 PM
    • 13 Posts
    • 4 Thanks
    Young_Investor
    Help to Buy ISA to Lifetime ISA Question
    Hopefully someone more knowledgeable than me can help.

    I have a Help to Buy ISA which I have contributed to in the 2017/18 tax year. I am aware these 2017/18 contributions count towards the overall £4,000 LISA allowance, once transferred.

    I also set up a Nutmeg LISA in April to start the 12 month ball rolling (staying within the combined £4,000 allowance).

    However, is it possible for me to transfer my H2B ISA to the Skipton Cash LISA, while also having contributed to the Nutmeg S&S LISA?

    Do my 2017/18 H2B ISA contributions count as 2017/18 LISA contributions once my H2B ISA has been transferred into a LISA and therefore mean I have 'contributed to more than once LISA in the same tax year' as per the rules i.e. Skipton LISA (via H2B ISA contributions and Nutmeg LISA?

    Or is my only option to transfer my H2B ISA to Nutmeg, once they finally allow you to do this?

    Many thanks to any once whom can answer my questions.
    • Alexland
    • By Alexland 16th Oct 17, 12:43 PM
    • 427 Posts
    • 254 Thanks
    Alexland
    Hi

    Apologies for the delay in someone answering.

    You can only have one LISA each tax year but you can move it between providers and types and continue to contribute with the new provider until you reach the the annual limit.

    So you can transfer the Nutmeg to Skipton then transfer the HTB into Skipton and make up any remaining contribution up to the £4k limit (the combined total of the Nutmeg & Skipton LISA and the 17/18 HTB contributions)

    Alex
    Last edited by Alexland; Yesterday at 12:46 PM.
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