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  • FIRST POST
    • atreides7887
    • By atreides7887 2nd Oct 17, 8:32 AM
    • 14Posts
    • 2Thanks
    atreides7887
    Converting Cash LISA to Stocks and Shares LISA
    • #1
    • 2nd Oct 17, 8:32 AM
    Converting Cash LISA to Stocks and Shares LISA 2nd Oct 17 at 8:32 AM
    Hello All,

    Should be a very quick and easy question here. This page (https://www.gov.uk/individual-savings-accounts/transferring-your-isa) indicates I can convert my Cash LISA to a Stocks and Shares LISA without paying a penalty (as it's remaining a LISA), is this correct?

    Thanks in advance.

    Regards,
    atreides7887
Page 1
    • Alexland
    • By Alexland 2nd Oct 17, 8:47 AM
    • 731 Posts
    • 461 Thanks
    Alexland
    • #2
    • 2nd Oct 17, 8:47 AM
    • #2
    • 2nd Oct 17, 8:47 AM
    Yes however your new provider would need to initiate the transfer away from skipton and unfortunatly most (if not all) are not ready with their LISA transfer processes yet.

    Its probably worth waiting for the LISA provider that meets your needs to get their transfer process online rather than jump at the first one that gets there. Which provider are you condidering and why?

    If you are thinking s&s then you are either saving for 60 (as I am) or your first house purchase is in the very distant future?

    Alex
    • atreides7887
    • By atreides7887 2nd Oct 17, 9:16 AM
    • 14 Posts
    • 2 Thanks
    atreides7887
    • #3
    • 2nd Oct 17, 9:16 AM
    • #3
    • 2nd Oct 17, 9:16 AM
    Thanks for the response.

    I didn't have a particular provider or transfer in mind. I am saving for a future house purchase but not sure how long into the future. I mainly wanted to make sure I understood the rules correctly.

    Regards,
    atreides7887
    • Alexland
    • By Alexland 2nd Oct 17, 12:55 PM
    • 731 Posts
    • 461 Thanks
    Alexland
    • #4
    • 2nd Oct 17, 12:55 PM
    • #4
    • 2nd Oct 17, 12:55 PM
    Well if you are investing even on a moderate risk 60% shares 40% bonds allocation such as Nutmeg balanced 3/5 fixed portfolio or buying the Vanguard Life Strategy 60 with AJ Bell or HL then you probably want to be at least 3 to 5 years away from the withdrawal date to avoid a crash happening when you withdraw from the LISA.

    I didn't know that when I bought my first home in 2007 so had about 1/3 of my deposit in 100% shares M&G Index Tracker S&S ISA (the 0.46% fee was very attractive in those days) and it worked out OK and I made a few £k so far better than saving in cash. I did sell the fund as soon as I had an offer accepted to avoid it dropping during the time it took to complete the purchase.

    Still a bit risky.. but looking back when the 2008 crash happened house prices dropped 25% anyway so it would have been ok to loose 50% of 1/3 of my deposit (so I would still have 5/6ths) and I still would have been better off owning a bigger proportion of the property and with a smaller mortgage.

    As such, and this goes against all the advice forum responders should be giving about keeping your deposit secure (so I might get flamed) but if it was my money I would still risk 1/3 of my house deposit in shares and bonds such as Nutmeg 4/5 or VLS80. Probably not 100% shares as bonds provide benefit from rebalancing which again I didn't know at the time.

    Alex
    Last edited by Alexland; 02-10-2017 at 1:22 PM.
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