Lifetime ISAs guide

Ed-1

adamh87 wrote: »

This is a great guide, and far beyond my mathematical knowledge (sadly!)

Martin's article says that after April 2018 the bonus will be paid on a monthly basis. So theoretically...

I have a maxed-out HTB ISA, if I then go through the transfer process in 17-18, fill up the allocation in that tax year then in late April 2018, dump another £4k in, I'd get effectively 3 years bonus in 2 years and a month? (assuming I can find somewhere to buy then...)

You would even if the bonus wasn't paid monthly. Under the original plans with the bonus paid annually, you could still claim the bonus in-year for house purchase.

hbaggy265

Hi, I have a question about LISA's. I have never owned a property but my partner has. So if I open up a LISA in April which I understand will be solely in my name, when it comes to buying a property for the first time (for me) will we be able to have a joint mortgage using the government bonus? Thanks.

hbaggy265

Hi, I have a question about LISA's. I have never owned a property but my partner has. So if I open up a LISA in April which I understand will be solely in my name, when it comes to buying a property for the first time (for me) will we be able to have a joint mortgage using the government bonus? Thanks

nb0900

Morning,

I have a query about the lifetime ISA which I do not think is covered on the website.

If I buy a house with the LISA and get the 25% contribution is the account then not valid to be used again for retirement savings when I am 60. Clearly I can still save but will those savings (in the LISA) be eligible for the 25% bonus at 60. If the saving are not eligible I could be loosing £10,000's of benefit when I am 60.

For example:

I save £8k in 2 years and buy a house. The government contributes £2k.

Can the LISA account then be use to save up £120k for the next £30k of benefit?

If not then using the LISA to buy a house will loose me a potential £30k when I am 60.

In this case it could be more beneficial to use the help to buy ISA for the house and save the LISA for later life. Although the short term benefit for the house deposit will be slightly higher with the LISA long term you could be loosing out big time.

Using the H2B for the house you are getting the benefits of both schemes, even if the house contribution will be less, pension contribution will be far greater.

I feel like this note hasn't been touched on the website. I am not quite sure the LISA is a 'no brainier'

Interested to know your thoughts. I could be completely wrong!

Thanks

r1chscott

Hi nb0900,

You get the 25% for every year that you save from the age of 18 up until the age of 50 - a maximum of 32 years.

So, you save the maximum for 2 years.
Year 1 - £4k plus the government 25% is paid once at the end of the first year, plus any interest that you earn.
Year 2 - £4k plus the government 25% is paid monthly when you pay in (so if you pay it in on the 7th April 2018 then you will get the extra £1k the following month and can then get the interest on it too)

If you then remove the full balance £10k plus the interest for buying your house then the account remains open and you can continue to pay in to it up until you are 50, if that allows you sufficient time to get the full £120k in then yes, you will get the full £32k.

Do bear in mind that if you are older than 18 when you open the account then you will not be able to save the full amount. If you are 30 when you open the account and use the first two years for buying a house then you would be left with 18 years to continue saving which will give you £72k plus the government top up of £18k.

These setup of age/what the money can be removed for could all change as the government is still in consultation about this product so I suggest you keep track of developments.

I hope that helps,

Rich.

r1chscott

Hi hbaggy265,

The Lifetime ISA is an individual product, so therefore you can have one and take advantage of the government bonus but your partner can't - but you can still buy the home together.

Hope that helps,

Rich.

cmazza

Hi Rich, thanks for th contribution I was just going to as the same question as nb0900

Lotsapedals

I understand that my wife and I can have separate LISA accounts which can both be used for our first house together. However this means with your mortgage calculator we would only be able to borrow around £100k less as a joint mortgage as she doesn't work. Would it have to be a joint mortgage to use both LISA's?

carhandle

Having read the guide, I’m slightly confused by this comment

“Once you open it you can keep contributing and get the bonus until you're 50.”

I understand that the bonus only gets paid until age 50.

However, does that sentence also mean that you cannot contribute beyond age 50?

Ed-1

carhandle wrote: »

Having read the guide, I’m slightly confused by this comment

“Once you open it you can keep contributing and get the bonus until you're 50.”

I understand that the bonus only gets paid until age 50.

However, does that sentence also mean that you cannot contribute beyond age 50?

Yes............