Lifetime ISAs guide

Alexland

You can transfer a Cash LISA into a S&S LISA (or the other way around) using the new provider's LISA transfer process without paying the early withdrawal penalty.

However this is only if you can find a new LISA provider accepting inbound LISA transfers at the time.

If you transferred to another type of ISA the early withdrawal penalty would apply.

Alex

[Deleted User]

Alexland wrote: »

You can transfer a Cash LISA into a S&S LISA (or the other way around) using the new provider's LISA transfer process without paying the early withdrawal penalty.

However this is only if you can find a new LISA provider accepting inbound LISA transfers at the time.

If you transferred to another type of ISA the early withdrawal penalty would apply.

Alex

Thanks. So if i buy a home before the max age allowed on this type of ISA (I think it was 50 or 60, but say I wanted to use the funds at age 22), I wouldn't have to pay the fee?

Alexland

With a Lifetime ISA you can open it until age 40, contribute until age 50 and access without penalty from age 60.

The only exception to the early withdrawal penalty is if your solicitor draws the money towards a qualifying first time property purchase.

I suggest you read the terms carefully but the key terms are that you need to be a first time buyer, buying a property you intend to live in worth no more than £450k and the LISA account needs to have been open 12 months from the initial contribution.

https://www.gov.uk/lifetime-isa

Alex

shamin

Can I put in £4k in one year and then potentially never again and cash in on £5k (£4k + gov £1k) at retirement?

george4064

shamin wrote: »

Can I put in £4k in one year and then potentially never again and cash in on £5k (£4k + gov £1k) at retirement?

Yes you can.


Note that the 25% on the £4k will be added to your account within 1 year of depositing the £4k.

masonic

shamin wrote: »

Can I put in £4k in one year and then potentially never again and cash in on £5k (£4k + gov £1k) at retirement?

You can, but this may not represent a very good return over the 20+ years the money is locked away. The 25% bonus alone is equivalent to a savings rate of just 1.1% over 20 years, so the interest rate or growth rate of investments would still need to be fairly good to compete with alternatives.

Alexland

shamin wrote: »

Can I put in £4k in one year and then potentially never again and cash in on £5k (£4k + gov £1k) at retirement?

As above this would be a terrible idea because of inflation. £5k + tiny interest in 20 years would not buy you what £4k would get you now. If you are using a LISA for retirement the 'safest' option to maintain your spending power would be a sensible S&S based LISA investment.

Alex

anderton46

Can I use some of my LISA for a house, and then continue saving for retirement

masonic

anderton46 wrote: »

Can I use some of my LISA for a house, and then continue saving for retirement

Yes, once you make the penalty free withdrawal from your (presumably) cash LISA for the house purchase, it would be advisable to transfer the remaining balance to a S&S LISA for retirement, since this will become a long-term investment.

Wikikenkey

Hi - Am I right in thinking that if I opened a Lifetime ISA today with a £1 and deposited £4000 in the account sometime late March this year, I should receive £1000 bonus sometime in July this year? For my next bonus of £1000 I would need to deposit another £4000 by April 2020?