Lifetime ISAs guide

masonic

playz28 wrote: »

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

Presumably Alex means the 5% current accounts, available from Nationwide and TSB.

Alexland

masonic wrote: »

Presumably Alex means the 5% current accounts, available from Nationwide and TSB.

Not exclusively - you can early terminate the Nationwide and Santander regular savers before 12 months to get money out. It's the HSBC, M&S and First Direct ones where your money is locked in for 12 months.

Alexland

Alexland wrote: »

HL still haven't paid my wife's LISA bonus from last tax year. Their most recent broken promise was that it would be in the account yesterday so I just messaged them again...

So having recently received last year's bonuses we go to contribute new money into our LISAs for this year to find HL have incorrectly recorded the transferred 2017 contributions as occuring this tax year so no further contributions are allowed. Another message sent...

Alex

nikosc

Hello,
I'm in the process of buying a new build (completion due in December) and my solicitor is unwilling to use my LISA as part of the exchange deposit. My LISA is with Skipton who require completion within 90 days of the solicitor requesting funds with the option to extend to 180 days.
This is what they have said on the matter:

Regarding the lifetime ISA, there is a condition that once funds are withdrawn completion must take place within 90 days. As the property is not yet built, completion will be on 10 days notice from the developer. We would be able to request an extension to the 90 days however whilst the property is anticipated for December it is inherent when buying a new build that delays can be experienced. So we would still be unable to provide any guarantees to the bank when requesting the extension.

Therefore we would be able to request the funds closer to the anticipated completion date, though we would be unable to use this for the exchange deposit. This is because the funds would be handed over the developer and we would no longer have control with which to return to the bank. Therefore we could not sign the declaration because we would be unable to return the funds within the 90 days.

I could take the money from the LISA, incur the penalty and top up with other savings but this would cost me over £3000 bonus. Is this right? I would've thought if it's significantly delayed they could just return the money to Skipton and reapply when there is a new estimated completion date.

Any advice is much appreciated. Thanks.

eskbanker

nikosc wrote: »

I would've thought if it's significantly delayed they could just return the money to Skipton....

But they're saying they can't do that because they'd no longer have access to that money:

we would be unable to use this for the exchange deposit. This is because the funds would be handed over the developer and we would no longer have control with which to return to the bank.

nikosc

eskbanker wrote: »

But they're saying they can't do that because they'd no longer have access to that money:

I see. So a LISA can't be used to exchange contracts on an incomplete property as there is no guarantee it will be completed in the 90/180 day time limit?

I don't really want to lose to bonus, I will inquire if the seller will accept a smaller deposit whilst the LISA funds are held with the solicitor.

Thanks.

masonic

If I were you I'd be more concerned about losing all the money handed over at this early stage if the developer goes into administration before completing the build.

This happened to some buyers in a development funded by P2P loans. The buyers had their interests protected by unilateral notes (UN1) secured on the development. One of the lenders in the P2P loan also bought one of the units in the development. It was the view of the Administrator that he and 38 other apartment purchasers would not get any of their deposit money back. There was not enough value in the property and development loans ranked ahead of their creditor claims.

kacielmorgan

I'm just in the process of setting up a private pension and now I'm beginning to wonder whether I'd be better off going for one of these accounts instead. Thoughts?

Zorillo

It would entirely depend on your circumstances. I wouldn't use it instead of a pension for your primary retirement savings, unless you're self employed?

JoeT947

Hi there,
I!!!8217;m just about to purchase my first home and have very fortunately been gifted the deposit by parents. However I!!!8217;d like to set up the lifetime ISA to save for a second property. However if I will have to face a charge because of the early withdrawal penalty I won!!!8217;t use this. It just doesn!!!8217;t seem very clear as to wether that!!!8217;s the case or not.