2016 Budget - ISA changes

Ed-1

nicky-evans wrote: »

Hi, if i open a LISA in April 2017 and deposit £4000 I will receive the £1000 bonus the following April. I have read that the bonus is then paid monthly from then on. So could I then deposit another £4000 in May and receive the £1000 bonus in June? So then I would have £10,000 in total?

I have searched for the answer but can not seem to find anything.
Thanks

You could deposit it from 6th April 2018 if you want and receive the next bonus at the end of April 2018. But yes, you're right.

camotran

Hello

Anyone know what would happen to your LISA if you were to move abroad? Assuming you'd have to pay the penalty to withdraw it, or keep a foreign account open in the UK until you were 60?

Thanks!

isasmurf

camotran wrote: »

Hello

Anyone know what would happen to your LISA if you were to move abroad? Assuming you'd have to pay the penalty to withdraw it, or keep a foreign account open in the UK until you were 60?

Thanks!

You can keep the account open, but you would not be allowed to make further payments into it. You would not be able to make a withdrawal for a property purchase, unless it was in the UK and to be your main residence.

Squashieselwob

Hi,
Im 18, and just heard about the LISA. Is it a good idea to open one for the 25% bonus? Is it really only going to cost the £1 deposit into the Skipton LISA? I am not planning on buying a house any time soon, and was wondering if it might be worth opening one for a later date?
Thanks
Josh

eskbanker

Difficult for anyone to know for sure whether it's right for you or not, but in general yes, worth doing if you're looking to save for a property purchase more than a year into the future, since everything you pay in (up to the £4K annual limit) is boosted by the 25% bonus.

You can read up on the LISA in more detail at http://www.moneysavingexpert.com/savings/lifetime-ISAs.

Ed-1

Squashieselwob wrote: »

Hi,
Im 18, and just heard about the LISA. Is it a good idea to open one for the 25% bonus? Is it really only going to cost the £1 deposit into the Skipton LISA? I am not planning on buying a house any time soon, and was wondering if it might be worth opening one for a later date?
Thanks
Josh

Well, you'd get a 25p bonus from depositing £1.

The point of putting £1 in now is to start the 12 month clock ticking to when you can withdraw penalty-free for house purchase.

As the interest rate on the account is so poor (0.5%) there's no point putting the maximum amount (£4,000 per tax year) in sooner than is necessary.

So most people are putting in £1 now and then £3,999 just before the tax year ends next April 2018. They'll then get a bonus of £1,000 (25% of £4,000) next May 2018. From 6th April 2018 (the next tax year) they can then put in another £4,000 and they'll get another £1,000 bonus paid into the account in May 2018 as the bonus is paid monthly from next year.

katsoocam

My husband and I both have NHS pensions and we are both higher rate tax payers. We pay our standard contributions but don't pay extra, because we want to retire before state pension age but not take our pension until then so we don't get a reduced amount.
We bought our first house recently but we are at the stage now where we have done most of our furnishing/decorating and our emergency fund/rainy day fund is starting to look pretty healthy (ie six months living expenses).
I have a stocks and shares ISA we put £1000 a month in which is designed to be for our retirement.
We both have 20-25 years left at work before we retire.
My plan was increase our stocks and shares contributions so they are £16000 each then get a lifetime ISA each for the guaranteed return?
We do plan to have kids so our income will be reduced for a period but we have already made savings to compensate for this, plus have a small inheritance in probate which will mean we can keep up our financial commitments while I am off. Plus my maternity pay is pretty good to be honest.
Would anyone suggest any additional/different plans?

Alexland

I am not an expert in the NHS pension scheme but do you have an AVC option to make additional contributions which might be available to draw upon earlier without affecting your main pension date and amount?

Alternatively have you considered investing via a SIPP for a 25% bonus (equivalent to basic rate tax relief) and then claiming the other 20% back via self assessment? You could still invest in the same assets as your S&S ISA.

For higher rate taxpayers locking money away in pension contributions almost always beats a LISA or S&S ISA.

Alex.