Lifetime ISAs guide
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The FAQs say that the "cost" (which will be no more than 3% per annum) will be deducted each year from the growth, which is not guaranteed and therefore it is possible that your LISA might not receive any annual and/or final payment.0
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The FAQs say that the "cost" (which will be no more than 3% per annum) will be deducted each year from the growth, which is not guaranteed and therefore it is possible that your LISA might not receive any annual and/or final payment.
Foresters Friendly's annual charge of 1.25% (capped at 3%) is expensive compared to a HL or AJ Bell LISA where the total annual charge with a better investment (for example the Blackrock Consensus 85 fund) will be under 0.60%. As such you are paying an extra 0.65% each year which even on the first £4k year one contribution is £26 multiplied by 20+ years. Or if you want to transfer out after being a customer long enough to get the incentive then you face an early surrender penalty which is likely to be much more than the incentive.
Alex0 -
Or if you want to transfer out after being a customer long enough to get the incentive then you face an early surrender penalty which is likely to be much more than the incentive.
Alex
Not true - you only pay the penalty if you close the LISA, You don't pay a surrender penalty if you transfer it to a different LISA manager.0 -
Not true - you only pay the penalty if you close the LISA, not if you transfer it to a different LISA manager.0
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Not sure how you managed to quote my post and include Alex's reply, but if there really is no charge to transfer elsewhere then staying for 3 months to collect the incentive and then transferring to another provider would be worth considering. You'd need to be certain about the exit fees though.
It would have to be on the website if there were transfer fees. As far as I can see, the worst that can happen is that they send you the m&s voucher after 3 months but no growth when you transfer it to another provider.0 -
Not true - you only pay the penalty if you close the LISA, You don't pay a surrender penalty if you transfer it to a different LISA manager.
I wasn't taking about the LISA early withdrawal penalty (which I agree wouldn't apply if you transferred to a new LISA provider) but the reduction in value you may suffer from surrendering the with-profits fund investment. This is mentioned in the product small print but the calculations are not detailed anywhere obvious.
Alex0 -
It would have to be on the website if there were transfer fees. As far as I can see, the worst that can happen is that they send you the m&s voucher after 3 months but no growth when you transfer it to another provider.
Edit: As Alex states above, a Market Value Reduction could apply and this is mentioned on the website, but the size of this and when it can be applied is not defined (by the vague description given, it appears to constitute the loss of all capital protection and is therefore limited only by the loss potential of the underlying assets of the investment fund, which could be anything). I suspect there is no way of knowing this in advance, and if it were more than say 6%, you could get back less, even taking account of the gift card, than you put into the scheme.0 -
Dear all,
I'm completely new to this but I plan to buy a house in 3-4 years. I get salary from my studies and I work multiple part-times, I have Help to Buy but I want to move to Lifetime ISA (I know time is ticking for this end of tax year). Can you confirm if I got this right:
- deposit max £4k/tax year (so I can right now put £4k before 5th April + another £4k after)
- 25% penalty on any amount taken out (with or without the bonus?)
- receive bonus ONLY when buying house/retirement (is bonus added every tax year or only to amount taken for house?)
I have about £8k in my Help to Buy, can I transfer all or can only put £4k into Lifetime ISA as per its max limit?
I must say I'm a bit terrified putting all money into, of course I will have a saving account for a rainy day but is it possible that the Lifetime ISA can crash and I would loose all that? My apologies, I'm not very familiar with such yet but heard about banks going down previously and people loosing their savings.
Also to open Lifetime ISA it's often only online, is it fast/safe? How about solicitor fees, how much would that eat into my savings?
Thank you for your help, I know you get asked this all the time so huge thanks!0 -
Can you confirm if I got this right:
- deposit max £4k/tax year (so I can right now put £4k before 5th April + another £4k after)- 25% penalty on any amount taken out (with or without the bonus?)- receive bonus ONLY when buying house/retirement (is bonus added every tax year or only to amount taken for house?)I have about £8k in my Help to Buy, can I transfer all or can only put £4k into Lifetime ISA as per its max limit?I must say I'm a bit terrified putting all money into, of course I will have a saving account for a rainy day but is it possible that the Lifetime ISA can crash and I would loose all that? My apologies, I'm not very familiar with such yet but heard about banks going down previously and people loosing their savings.Also to open Lifetime ISA it's often only online, is it fast/safe?How about solicitor fees, how much would that eat into my savings?0
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