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  • FIRST POST
    • WillPS
    • By WillPS 12th Mar 17, 11:34 AM
    • 189Posts
    • 86Thanks
    WillPS
    If no Savings Lifetime ISAs are available on April 6th...
    • #1
    • 12th Mar 17, 11:34 AM
    If no Savings Lifetime ISAs are available on April 6th... 12th Mar 17 at 11:34 AM
    Can an 'investment' Lifetime ISA (with Nutmeg or that other one which will be doing them) be transferred in to a savings Lifetime ISA within the financial year?

    If true, does opening an 'investment' Lifetime ISA 'start the clock' on the 1 year countdown before the balance can be used to purchase a house, even if the account is transferred to a savings account down the line?

    I am looking to buy a home in around 13-14 months time so I need to be quick off the draw with opening a Lifetime ISA if I'm to benefit from the higher amount which it take in deposits. I'd really hoped that at least one bank or building society would have committed to having one ready for three-weeks on Thursday but it doesn't look like that will happen.
Page 1
    • Jo Blogs
    • By Jo Blogs 12th Mar 17, 11:40 AM
    • 750 Posts
    • 2,573 Thanks
    Jo Blogs
    • #2
    • 12th Mar 17, 11:40 AM
    • #2
    • 12th Mar 17, 11:40 AM
    Hargreaves Lansdown the UK’s biggest retail broker, has confirmed it will be launching the Lisa in April

    https://www.ft.com/content/a487303e-fe6f-11e6-96f8-3700c5664d30
    Saved Nitty Gritty £7440.75 [149%] / £5000-[Aug] £58.44 for the 'Save 12k in 2017' #157
    2017 Womble #35 £3463.27 July NSDs 19/15CCCChl 7/12 months
    July PPChl#002 Pts 71
    • glider3560
    • By glider3560 12th Mar 17, 12:30 PM
    • 3,223 Posts
    • 1,943 Thanks
    glider3560
    • #3
    • 12th Mar 17, 12:30 PM
    • #3
    • 12th Mar 17, 12:30 PM
    Hargreaves Lansdown the UK’s biggest retail broker, has confirmed it will be launching the Lisa in April

    https://www.ft.com/content/a487303e-fe6f-11e6-96f8-3700c5664d30
    Originally posted by Jo Blogs
    The OP is asking about Cash LISAs. HL's offering will be a S&S LISA.

    • xylophone
    • By xylophone 12th Mar 17, 12:33 PM
    • 22,396 Posts
    • 12,918 Thanks
    xylophone
    • #4
    • 12th Mar 17, 12:33 PM
    • #4
    • 12th Mar 17, 12:33 PM
    https://www.moneymarketing.co.uk/issues/9-march-2017/osborne-hangover-govt-gets-desperate-lifetime-isas/

    http://www.thisismoney.co.uk/money/saving/article-4268846/Why-NO-bank-offer-Lifetime-Isa.html

    https://www.gov.uk/government/news/lifetime-isas-available-from-6-april-2017
    under Withdrawals and Transfers
    • masonic
    • By masonic 12th Mar 17, 1:00 PM
    • 9,126 Posts
    • 6,273 Thanks
    masonic
    • #5
    • 12th Mar 17, 1:00 PM
    • #5
    • 12th Mar 17, 1:00 PM
    The OP is asking about Cash LISAs. HL's offering will be a S&S LISA.
    Originally posted by glider3560
    Presumably with no requirement to buy any investments, so quite usable if no interest bearing LISAs are available at the time.
    • bowlhead99
    • By bowlhead99 12th Mar 17, 2:53 PM
    • 6,605 Posts
    • 11,682 Thanks
    bowlhead99
    • #6
    • 12th Mar 17, 2:53 PM
    • #6
    • 12th Mar 17, 2:53 PM
    Per the draft update to the ISA regulations which will allow the creation of LISAs (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/562893/LifetimeISA_regs_7.pdf) which are available as part of the consultation which was open for industry feedback from October to January (https://www.gov.uk/government/consultations/draft-legislation-lifetime-isa) and are not yet implemented as law:

    The part about conditions to take a penalty free withdrawal to buy a qualifying property says, inter alia -
    The account investor’s Lifetime ISA from which the withdrawal is made must have been open for at least 12 months after the date of the first payment into it and, for this purpose, a Lifetime ISA opened in the circumstances provided for in regulation 12B(4)(e)(ii) is to be treated as being the same Lifetime ISA from which the moneys received originated.
    by (7)
    12B(4)(e)(ii) is the regulation that talks about the conditions for opening a LISA and that you must be under age 40 unless among other things you are just doing a transfer in from another existing current or prior year LISA:
    a transfer of current year’s subscriptions or previous years’ subscriptions from another Lifetime ISA (within the meaning of regulation 21(1))
    by 12B(4)(e)(ii)(aa)
    So it is pretty clear that you generally can't get the government bonus if you have not had your LISA for 12 months BUT for that purpose the LISA that you have from which you're trying to withdraw the money will be considered to be all the same one into which you originally paid your contributions, in a situation where you made some initial contributions into "LISA 1" and then later transferred it into "LISA 2".

    As such, if OP opens an account with "Nutmeg or that other one that will be doing them" (for which, someone else gave an example as Hargreaves Lansdown) during April 2017 and puts some money into it... and then later transfers their balance into a cash-based LISA product with ABCXYZ Bank plc in, say, October 2017, and wants to withdraw money from it in May 2018 at completion of their property purchase:

    The LISA must have been open for at least 12 months, and for that purpose, the Cash LISA with ABCXYZ counts as being all the same LISA as the Nutmeg/HL ISA which originally started to receive contributions in April 2017, which was 13 months before the withdrawal date, so it's fine.

    Of course, draft regulations are draft. Best to read the final updated regulations and the guidance from product providers once the products actually exist. Some S&S LISA providers will quite rightly have transfer out charges because they don't want to work for free and be used as a warehouse for you to dump your cash temporarily while shopping around for some other provider who has not yet come to market.
    • Rich2808
    • By Rich2808 12th Mar 17, 3:17 PM
    • 464 Posts
    • 382 Thanks
    Rich2808
    • #7
    • 12th Mar 17, 3:17 PM
    • #7
    • 12th Mar 17, 3:17 PM
    Don't HL offer a cash holding option within their Stocks and shares ISA? You get 25 per cent interest from the government.
    • bowlhead99
    • By bowlhead99 12th Mar 17, 3:32 PM
    • 6,605 Posts
    • 11,682 Thanks
    bowlhead99
    • #8
    • 12th Mar 17, 3:32 PM
    • #8
    • 12th Mar 17, 3:32 PM
    Don't HL offer a cash holding option within their Stocks and shares ISA? You get 25 per cent interest from the government.
    Originally posted by Rich2808
    Yes, HL allow you to hold cash in a S&S ISA pending investment. It pays 0.00% interest. They may choose to offer the same in their LISA, which does not yet exist.

    Instant-access rates somewhat greater than 0.00% exist outside ISAs (for example in Nationwide's 5.00% current account or regular saver account).

    So given the scant initial availability of LISA products, if you are planning on buying in May 2018 it would make sense to accumulate most of the funds outside the LISA wrapper (in an interest-paying HTB ISA or non-ISA account), and only transfer the bulk of the funds to a LISA late in the 2017/18 tax year, having first 'got the 12-month countdown timer started' with a nominal amount of money in a LISA product which might not end up being the LISA product that you are still using once the market has matured and you move the bulk of the money in during early calendar 2018.
    • WillPS
    • By WillPS 12th Mar 17, 11:20 PM
    • 189 Posts
    • 86 Thanks
    WillPS
    • #9
    • 12th Mar 17, 11:20 PM
    • #9
    • 12th Mar 17, 11:20 PM
    Excellent! Thanks for the advice everyone.
    • glider3560
    • By glider3560 13th Mar 17, 7:18 AM
    • 3,223 Posts
    • 1,943 Thanks
    glider3560
    If you take the HL option, watch out for any transfer fees.

    On their stock and shares ISA, they currently charge £25 to transfer money as cash to another provider.

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