Lifetime ISAs guide

Alexland

greenglide wrote: »

It is the same as the HTB ISA in this respect, isnt it. You have to take out a mortgage, even if it is just £1.

Yes although the setup fees on a £1 mortgage if you can find a lender willing to participate would probably outweigh the bonus!

ancilla100

AbbiP wrote: »

Hi all,

I'm new to the forum, but I joined because I have just completed a house purchase and used my LISA so I wanted to share some tips on using the LISA from my own experience to help others in planning their purchase timeline as not many solicitors/conveyancers have come across them yet and finding info on timings can be really tough:

1) It seems naive, but I was not aware of the paperwork required to release my funds from my LISA to my solicitor without paying the penalty. You can find the two declaration froms on their FAQs section under a sub-section called "First Time Buyer?" (I can't post a link as I'm too new)

2) This paperwork can be completed up to 30 days before your 12 months are up to enable faster processing. My timeline was really quick, but as I read on another thread, this may be because not many accounts will be ready to withdraw yet...

3) Here's my timeline but there is one thing to bear in mind: I phoned and chased Skipton and their lovely customer service team almost daily. I can only say good things about their customer service and would highly recommend them.

24/06/2018 Date forms given to solicitors (dropped through letterbox)
25/06/2018 Date sent to Skipton first class post (confirmed via email from solicitors)
26/06/2018 Date Skipton received forms (confirmed through phone call to customer services)
02/07/2018 Called Skipton helpdesk for an update
03/07/2018 Called Skipton helpdesk for an update
04/07/2018 Form received via email 10:09
04/07/2018 Form signed electronically and returned via email - confirmation received 10:13
04/07/2018 Email from Skipton confirming transaction of funds 15:34
04/07/2018 Email from solicitors confirming receipt 16:29
06/07/2018 Completion date

4) Once you complete, your conveyancer or solicitor must send off proof of completion to ensure you don't pay a penalty.

I really hope this helps anyone who is looking to buy their first home and thanks again to all of Skipton's customer service team for their exceptional response times and professionalism. I felt so awful chasing every day, but I'm glad that it worked out.

Good luck first time buyers!

Thanks so much for posting this. I was looking for something similar last night as I started to panic about things so I thought I'd share my timeline as well for people.

21/09/2018 Date forms given to solicitors (emailed a scanned copy)
21/09/2018 Date sent to Skipton
02/10/2018 Form received via email 11:46
02/10/2018 Form signed electronically and returned via email 11:49- confirmation received
03/10/2018 Email from Skipton confirming transaction of funds 16:14
03/10/2018 Forwarded Skipton email to solicitor and asked for confirmation of receipt 16:45
04/10/2018 Email from solicitors confirming receipt 09:42

Please note that I didn't chase Skipton at all during this process. I'll update this as soon as the other steps have happened.

masonic

It seems those using a LISA can breathe a sigh of relief, there seem to be no plans in the budget to axe them just yet.

Ed-1

masonic wrote: »

It seems those using a LISA can breathe a sigh of relief, there seem to be no plans in the budget to axe them just yet.

https://www.yourmoney.com/mortgages/lifetime-isa-set-stay-government-rejects-abolishment-calls

Mcfaggen

We have just exchanged contracts on our home buy and we're both using HTB ISA's to make it happen.

Am I still eligible (I'm under 40) to take out a LISA for 'retirement' savings?

eskbanker

Mcfaggen wrote: »

We have just exchanged contracts on our home buy and we're both using HTB ISA's to make it happen.

Am I still eligible (I'm under 40) to take out a LISA for 'retirement' savings?

In a word, yes.

Since you wouldn't have (penalty-free) access until you're 60, it would be worth considering using the S&S variant for growth over that long term rather than a cash-based product that would be unlikely to keep pace with inflation....

Mcfaggen

Thanks eskbanker.

Agree on a S&S portion, but I'm a fairly risk adverse sort... so would likely do a mix between the two perhaps one year S&S, one year Cash, etc. Appreciate this may not be the path to maximum benefit, but fits with my approach.

Alexland

Mcfaggen wrote: »

Agree on a S&S portion, but I'm a fairly risk adverse sort... so would likely do a mix between the two perhaps one year S&S, one year Cash, etc. Appreciate this may not be the path to maximum benefit, but fits with my approach.

Most people will have a portfolio that mixes shares with bonds (fixed income) to control volatility and mixed asset funds do this automatically for you. You can hold these types of funds in a S&S Lifetime ISA. Anything above balanced risk (circa 60% shares, 40% bonds) should stand a good long term prospect of beating inflation after fees with a few ups/downs along the way. If saving for retirement you shouldn't need a Cash Lifetime ISA account.

My view is that Hargreaves Lansdown and AJ Bell YouInvest are the best in the LISA platform market and the choice should be based on lowest cost which will depend on the size and frequency of your contributions. Generally HL are better for small frequent contributions and AJ Bell are best for larger lump sums.

In terms of funds consider Vanguard LifeStrategy, Blackrock Consensus (discounted on HL) and HSBC Global Strategy which are all very similar low cost mixed asset funds and each offer a range of increasing risk/reward profiles.

https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds

Alex

vdo0x1

Hi all,

My partner and I want to open a LISA each to save for a family home within the next few years.

I've had a skim through this very useful thread and have some questions, I hope it's OK to ask here.

1. Would it make the buying process easier or more complicated to get LISAs from different providers?

2. Seeing as interest accrues monthly, am I right in saying it would be best to pay in as much as possible and as soon as possible until the £4k yearly cap is reached?
So if I put in £4k in November 2018, am I not allowed to put in any more until November 2019 or does the term refresh with the financial year in April? We're quite certain we can put in the full amount in at the first opportunity every year.

3. We are considering Skipton and Nutmeg. We looked at Newcastle BS too, but they don't have any local branches. Any personal experiences and thoughts welcome.

4. Specifically with Nutmeg: if it performs badly, can it eat into the government bonus too? I'm trying to understand the risk involved with a stocks & shares approach. Our risk appetite is quite low.
The interest is basically negligible at around 1% with the other providers so we're prepared to risk getting no interest if it means we might potentially get more, but we don't want to risk the government bonus - that's what we're in this for really, not the rubbish interest rates.

Thanks in advance.

Alexland

It really depends how long you think it will be until you buy a property. S&S investements are not suitable for time periods of less than 5 years as the probability of suffering a loss bigger than any accumulated gains is unacceptably high. For anything less than 5 years stick to cash unless you just want to take a gamble. Some providers, acting in self interest to get a new customer, say 3 years but frankly that's a bit irresponsible of them.

With a LISA the contributions are added into the account a few weeks after each contribution so if they were also invested (as they would be automatically with Nutmeg) then they could also suffer loss.

If you are sticking with a Cash LISA there is no need to use with multiple providers (as cash products have FSCS protection up to £85k) just go for the best interest rate. As a couple having different providers is fine but it doesn't make anything easier.

If you add £4k in November you can add another £4k from the start of each tax year on 6th April.

You may find holding the money elsewhere until towards the end of the tax year generates more interest. However don't leave it too tight incase your contribution is unexpectedly rejected or your provider has problem verifying your identiy, bank account, etc.

Remember the LISA accounts need to be open at least 12 months from their initial contribution before they can be used to buy a property without penalty so getting the clock started is important.

Alex.