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  • FIRST POST
    • Danny-r
    • By Danny-r 10th Jul 17, 11:02 PM
    • 7Posts
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    Danny-r
    Lisa
    • #1
    • 10th Jul 17, 11:02 PM
    Lisa 10th Jul 17 at 11:02 PM
    Hey Guys,

    Looking for some advise (or to confirm what I think, at least).

    Me and my fiance are looking at saving up to purchase a house. This is where the LISA will at least partly come in.

    I understand that the 25% bonus is paid at the end of the tax year, so April 2018. So if I was to pay £4000 in to the LISA in March would I receive a £1000 bonus in April essentially?
    Last edited by Danny-r; 10-07-2017 at 11:04 PM.
Page 1
    • greenglide
    • By greenglide 10th Jul 17, 11:13 PM
    • 2,841 Posts
    • 1,820 Thanks
    greenglide
    • #2
    • 10th Jul 17, 11:13 PM
    • #2
    • 10th Jul 17, 11:13 PM
    Yes, you would.

    And from that point on all contributions from April 2018 will get the bonus the month after paid in. It is only in 2017-2018 that they are paid at the end of the year.
    • Danny-r
    • By Danny-r 10th Jul 17, 11:26 PM
    • 7 Posts
    • 1 Thanks
    Danny-r
    • #3
    • 10th Jul 17, 11:26 PM
    • #3
    • 10th Jul 17, 11:26 PM
    Yes, you would.

    And from that point on all contributions from April 2018 will get the bonus the month after paid in. It is only in 2017-2018 that they are paid at the end of the year.
    Originally posted by greenglide
    Thank you. So I assume then that the most efficient way to do it would be to put £333.33 in each month (£4000 / 12) in order to gain the maximum bonus? Or could I put £4000 in at any stage during those 12 months, including March 2019, and be paid a 25% bonus at the end of that month.
    • bowlhead99
    • By bowlhead99 10th Jul 17, 11:47 PM
    • 6,694 Posts
    • 11,898 Thanks
    bowlhead99
    • #4
    • 10th Jul 17, 11:47 PM
    • #4
    • 10th Jul 17, 11:47 PM
    You could pay in a twelfth every month if you like, or the whole £4000 straight away on 6 April 2018 - or even the whole £4000 last thing on 5 April 2019 if you're confident the funds will clear that day and willing to take a £1000 risk they don't.

    For many people the most effective thing to do will be to put monthly chunks into a regular monthly saver account from Nationwide or similar, which pays 5% on up to £500pm. Then once it's all piled up towards the end of the tax year, take £4000 out of the regular saver account and throw it in the LISA to make sure you don't miss out on the bonus for the contributions for that tax year. Likely the LISA will not have as good an interest rate as the best you'll find elsewhere.
    • Danny-r
    • By Danny-r 10th Jul 17, 11:52 PM
    • 7 Posts
    • 1 Thanks
    Danny-r
    • #5
    • 10th Jul 17, 11:52 PM
    • #5
    • 10th Jul 17, 11:52 PM
    You could pay in a twelfth every month if you like, or the whole £4000 straight away on 6 April 2018 - or even the whole £4000 last thing on 5 April 2019 if you're confident the funds will clear that day and willing to take a £1000 risk they don't.

    For many people the most effective thing to do will be to put monthly chunks into a regular monthly saver account from Nationwide or similar, which pays 5% on up to £500pm. Then once it's all piled up towards the end of the tax year, take £4000 out of the regular saver account and throw it in the LISA to make sure you don't miss out on the bonus for the contributions for that tax year. Likely the LISA will not have as good an interest rate as the best you'll find elsewhere.
    Originally posted by bowlhead99
    Thank you. Exactly what I'm looking at doing and I just wanted to be sure I wouldn't lose out by keeping it in a higher interest account for the rest of the year.
    • hardleyouth
    • By hardleyouth 11th Jul 17, 9:41 AM
    • 382 Posts
    • 1,058 Thanks
    hardleyouth
    • #6
    • 11th Jul 17, 9:41 AM
    • #6
    • 11th Jul 17, 9:41 AM
    You could pay in a twelfth every month if you like, or the whole £4000 straight away on 6 April 2018 - or even the whole £4000 last thing on 5 April 2019 if you're confident the funds will clear that day and willing to take a £1000 risk they don't.

    For many people the most effective thing to do will be to put monthly chunks into a regular monthly saver account from Nationwide or similar, which pays 5% on up to £500pm. Then once it's all piled up towards the end of the tax year, take £4000 out of the regular saver account and throw it in the LISA to make sure you don't miss out on the bonus for the contributions for that tax year. Likely the LISA will not have as good an interest rate as the best you'll find elsewhere.
    Originally posted by bowlhead99

    But wouldn't you miss out on the compounded interest or growth this way which may (or may not) exceed the benefit of a 5% regular saver?
    • eskbanker
    • By eskbanker 11th Jul 17, 9:58 AM
    • 5,465 Posts
    • 5,270 Thanks
    eskbanker
    • #7
    • 11th Jul 17, 9:58 AM
    • #7
    • 11th Jul 17, 9:58 AM
    But wouldn't you miss out on the compounded interest or growth this way which may (or may not) exceed the benefit of a 5% regular saver?
    Originally posted by hardleyouth
    Not for the cash LISA scenario, where the solitary currently-available product only pays 0.5% interest, so 0.5% of a bonus-enhanced £5K (=£25) will be significantly less than the 5% of an average balance of £2K (=£100) in a regular saver. Obviously if better cash LISAs come along before April 2018 then this could change the equation but it would need a substantially more generous new proposition to outweigh the 5% regular saver option.

    For a S&S LISA, nobody knows what the growth (if any at all) will be so it isn't so clear-cut. However, it's generally inadvisable to be investing property deposit money at all (unless for the long term) and anyone who does should be investing in low-risk options which are therefore less likely to deliver stellar returns (but would correspondingly soften any falls once we reach the end of this bull run).
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