Lifetime ISAs guide

belfast_gal

Hi folks,

Need some advice please re Skipton Cash LISA. I opened this in March 2018 by transferring in from a cash ISA I already had that wasn't earning anything really.

I went for the Cash LISA because it seemed to be the most straightforward thing to do at the time. However this is for my retirement, so I'm now thinking that I should have gone for a stocks and shares LISA.

Questions:
- Can I transfer my Skipton Cash LISA to a stocks and shares LISA?
- If yes, who to?
- Would I be better to open a stocks and shares LISA separately now, with a view to transferring in later? (I am now 39 so approaching cut off date).

TIA for your help

masonic

belfast_gal wrote: »

Questions:
- Can I transfer my Skipton Cash LISA to a stocks and shares LISA?
- If yes, who to?
- Would I be better to open a stocks and shares LISA separately now, with a view to transferring in later? (I am now 39 so approaching cut off date).

Yes, you can transfer it. The problem is that there are limited options for LISAs that accept transfers from other providers. I know that AJ Bell do and this could be a good option in terms of charges. It looks as though Hargreaves Lansdown are not accepting transfers from other LISAs at the moment. The other two options are Nutmeg (who don't currently accept transfers) and the Share Centre (who do) - these are much less flexible in terms of what you can invest in, but might be of interest if you want to pay a higher management fee for someone else to take investment choices out of your hands.

Whether you transfer or not, the first step is to open a new LISA and if you do so now and haven't paid into one this tax year you can fund it with or without transferring. Once you are 40, you can only fund a new LISA after transferring.

belfast_gal

Thanks for that great advice masonic, I have opened a new stocks and shares LISA with AJ Bell and applied to transfer my cash LISA in. Cheers!

CLevy

Hi everyone,

I have £2000 in my LISA. However, due to HMRC issues, I cannot get my bonus. I want to withdraw my money (I know I have to pay the 5% penalty fee) but as I didn't get the bonus, surely I don't lose 25% also? As that's my money they'd be taking, not taking the Gov money back.

Hopefully someone can help!
Thanks.

Alexland

belfast_gal wrote: »

Thanks for that great advice masonic, I have opened a new stocks and shares LISA with AJ Bell and applied to transfer my cash LISA in. Cheers!

You will also need to decide what to invest the money in. Something like the Vanguard LifeStrategy 80 fund will be low cost (0.22%) and provide you good growth over the next 20+ years with a few ups and downs along the way. Don't forget to maintain a small cash balance to pay the ongoing 0.25% platform fee.

Alexland

CLevy wrote: »

I have £2000 in my LISA. However, due to HMRC issues, I cannot get my bonus. I want to withdraw my money (I know I have to pay the 5% penalty fee) but as I didn't get the bonus, surely I don't lose 25% also? As that's my money they'd be taking, not taking the Gov money back.

What makes you think you will not get your bonus - are you one of the people for who it is delayed?

If you withdraw any money from the LISA (other than for a qualifying property purchase or from age 60) it will be subject to a 25% penalty regardless of if it was the original contribution or bonus money.

Even if you do withdraw the original contribution (and pay a penalty) the bonus should still be added to the account in time.

Alex

leet5

Just after some thoughts/advice...

My lifetime isa will have the max allowed in 2 months time (£4k).

As I will be continuing to save each month, where would I be best putting these funds ?

Can't lock them away for the year as I will probably need it before.I am expecting to buy a house around May/June next year, so I am becoming a little fuzzy with what my options are.

I have a Nationwide 5% so can put some in there, but wouldn't want to if there is a better option.

Thanks in advance.

Alexland

If you need access to the money soon then the 5% easy access bank savings account(s) are probably your best bet. Try and build enough cash to make a full £4k LISA contribution on 6th April 2019 so the next £1k bonus is added before your solicitor needs to withdraw the LISA balance.

Alex

leet5

Yes i thought so too.

I'm lucky enough to work for a law firm that does conveyancing, so I have that part covered :-)

playz28

When you say 5% easy access bank savings account(s), did you mean regular saver accounts? I.e 250 a month for 12 months?