Lifetime ISAs guide

Alexland

We have made about £250 each from Nutmeg LISAs so far and the investment has been equivalent to a VLS fund on HL. Nutmeg and HL both charge 0.45% platform fees (assuming Nutmeg fixed allocation) but the Nutmeg funds are only 0.17% whereas VLS would be 0.22%.

However once the LISAs get to £15k each in 18 months time we intend to move to HL to hold ETF/ITs to benefit from the HL £45 cap.

AJ Bell YouInvest are likely to be the cheapest LISA after £10k at year 2 but we already have other investments with them so avoid to spread risk.

Alex

oz0707

If holding funds though i.e. Vanguard once you get past year 2 i.e. 10k are you not better off from £45 max charge. 22.50 better off each year.

Considering I'm only interested in holding funds h&l looks to be the way forward for now. Will look at aj bell if worthwhile though

theythinkimmexican

hi all,

looking for some clarification on these lisa accounts.

my partner and i are saving up a deposit for our first house. we each opened a lisa with skipton in september 17 and deposited the minimum £1.

i have around 13k saved just now and i'm aiming to have around £16k saved by june this year. my plan is to deposit 4k to each of the skipton accounts in the next month or so, so that we each get the 1k bonus in may (so we should have a total of 10k between us from 8k in). then, once i have saved up the next 8k i will do the same again (as i mentioned this should be around june 18). now there will be 8k deposited in each account, total of 16k deposited, with 2k bonus for fy17, but i'm wondering how the bonus will work for fy18. should i expect another 2k bonus the month after the second deposits? and if so are we able to then use the £20k as soon as we get the bonus or do we need to wait till september which would be 12 months after we opened the accounts?

i've read as much as i can about these saving accounts but i'm still unsure about the details of when the bonus is paid and when we can spend it.

thanks

Alexland

oz0707 wrote: »

If holding funds though i.e. Vanguard once you get past year 2 i.e. 10k are you not better off from £45 max charge. 22.50 better off each year.

Considering I'm only interested in holding funds h&l looks to be the way forward for now. Will look at aj bell if worthwhile though

At £10k the fees for VLS on HL would be £22 Vanguard + £45 HL compared to £17 Nutmeg ETFs + £45 Nutmeg so Nutmeg would be £5 cheaper.

HL and AJ Bell only cap their LISA charges on Shares, ETFs and ITs - funds platform charges are uncapped. As such when a LISAs gets bigger it will be time for us to move away from funds.

AJ Bell have a 0.25% platform fee (so 0.20% cheaper than HL) but they charge £1.50 to trade funds so better suited to lump sums or later years.

Alex.

Alexland

theythinkimmexican wrote: »

.
my partner and i are saving up a deposit for our first house. we each opened a lisa with skipton in september 17 and deposited the minimum £1.

i have around 13k saved just now and i'm aiming to have around £16k saved by june this year. my plan is to deposit 4k to each of the skipton accounts in the next month or so, so that we each get the 1k bonus in may (so we should have a total of 10k between us from 8k in). then, once i have saved up the next 8k i will do the same again (as i mentioned this should be around june 18). now there will be 8k deposited in each account, total of 16k deposited, with 2k bonus for fy17, but i'm wondering how the bonus will work for fy18. should i expect another 2k bonus the month after the second deposits? and if so are we able to then use the £20k as soon as we get the bonus or do we need to wait till september which would be 12 months after we opened the accounts?

i've read as much as i can about these saving accounts but i'm still unsure about the details of when the bonus is paid and when we can spend it.

You can put £3999 more in each account in by 5th April 18 and you will get £1k each in April/May 18. After that you can put up to £4k in each account at any time next tax year and you will get another £1k each around a month later. So in theory if you deposited on 6th April 18 you could have £10k each as early as May 18.

The accounts need to be open 12 months before you can use the money towards a purchase with the bonus and without penalty so yes September 18. Conveyancing usually takes several months so talk to your solicitor about when the money will be needed.

Alex.

theythinkimmexican

excellent, pretty much as i was expecting, but the wording of everything i've read so far has been a bit ambiguous so thanks for the clarification.

LegalCashier

I have a LISA with Skipton (£1) and a H2B ISA with Halifax (£6,251.85).

I’m planning to transfer the H2B into the LISA this month but I’m a little confused with what of the £6,251.85 will be count towards the £4,000.00 allowance in the LISA for 16/17?

Owen1991

LegalCashier wrote: »

I have a LISA with Skipton (£1) and a H2B ISA with Halifax (£6,251.85).

I’m planning to transfer the H2B into the LISA this month but I’m a little confused with what of the £6,251.85 will be count towards the £4,000.00 allowance in the LISA for 16/17?

If I'm correct then you've used up £1 of the £4000 for 17/18 so you could transfer the whole £6251.85 (as long as this was all deposited before 5 April 2017) into your LISA and add £3999 more in before 5 April 2018.

Ed-1

Owen1991 wrote: »

If I'm correct then you've used up £1 of the £4000 for 17/18 so you could transfer the whole £6251.85 (as long as this was all deposited before 5 April 2017) into your LISA and add £3999 more in before 5 April 2018.

It's not possible to have had £6,000 in a H2B ISA at 5th April 2017 as you could only deposit £1,200 and then £200 a month since Dec 15.

LegalCashier

December 2015 - £1,000.00
January - December 2016 - £200.00 x 12 = £2,400.00
December 2016 - £85.82 (interest)
January - December 2017 - £200.00 x 12 = £2,400.00
December 2017 - £166.02 (interest)
January 2018 - £200.00

Total: £6,251.85