Lifetime ISAs guide

Josephbrawn

Hi there looking for some urgent advice as we are nearing the end of the tax year!

My partner and I have been saving (not a lot) of money in our isa this tax year for a house however between us have only managed to save 4K. This means we still have 4K left that we could possibly put in. I have been looking at loans and borrowing 4K I would end up paying back interest of about 190 and so with the government bonus of 1k we would be getting 810 for free!! Does this seem like this would work or would there be any issues with this that anyone could see?

Many thanks!

Alexland

I have used a personal loan in the past to fill an ISA allowance with Zopa signing up via TopCashBack for a cash incentive. I took the loan out over a long period with reason 'other' but overpaid it back as quickly as possible within a few months. The incentive covered most of the loan costs so it was almost neutral.

If you have only saved £4k so far are you going to be able to both payback the £4k loan and contribute another two £4ks next tax year? That would require £12k so 3x the amount you have previously saved.

Alex

Josephbrawn

Oh well that’s good to hear! Yes both of our situations have changed. We both opened the LISA as soon as we left uni but didn’t really start putting into it properly where as now we both earn enough to be able to meet the repayments and fill the 4K. Thank you for you highlighting that though! Much appreciated!

Alexland

Cool don't forget you will also need to build up an adequate emergency pot in accessible cash. While it is understandable you are prioritising the maximum LISA bonus - it would be a shame if you suddenly needed the money and had to make a withdrawal.

Alex

Josephbrawn

Yes many thanks! We have a little rainy day fund in case of that! Can I ask however will skipton who is my LISA provider not get funny that both me and my partner suddenly deposit a large sum right before the tax year finishes? Like ask questions where it’s from?

Alexland

It should be fine if you are using your original funding source bank account and get your calculations right. I would try and get it done asap incase there are any unexpected problems. Some people last tax year forgot the £1 they used to open the account and made too high a contribution. If you do this Skipton return the whole contribution.

ejeavons

Hi,

If my partner is saving using a Help to Buy ISA and I opt for a LISA, can we use both if we go on to buy a house together? We are both first time buyers.

Thanks

eskbanker

ejeavons wrote: »

If my partner is saving using a Help to Buy ISA and I opt for a LISA, can we use both if we go on to buy a house together? We are both first time buyers.

Yes, this is possible, as long as the purchase complies with the rules of both schemes.

ejeavons

eskbanker wrote: »

Yes, this is possible, as long as the purchase complies with the rules of both schemes.

Ah ok, meaning the house must be under £250k as the help to buy dictates that...

Alexland

ejeavons wrote: »

Ah ok, meaning the house must be under £250k as the help to buy dictates that...

Yes but there are other product terms to consider such as the LISA needs to be open at least 12 months etc.