Lifetime ISAs guide

Suski19

Blimey sorry for being a dope! Thanks for replying.

cfw1994

Trying to help our uni-age children to chose a S&S LISA - thinking S&S since this is likely a 5-10+ year thing. They already have small regular Vanguard ISAs running with a little "ready-access" money should it be needed in the future: this would be more for future house or obviously 'pension supplement'

I am a personal believe in "low-cost wide-market" (the Lars Kroijer approach!) - it looks a moderate minefield on costs!

Nutmeg look reasonable, but I don't know much about them - I recall reading some reports suggesting their financials weren't the best about (pure speculation, I imagine!).
AJBell look next best, but there is almost zero track record on their low-cost adventurous funds.
HL worry me....they ignored the Woodford issue that boiled over this week.
Never heard of Moneybox as a company....& OneFamily look expensive.

Have to confess I haven't read the 100+ pages on this thread.....anyone got a recent and good comparison of the options available?

Anyone got good 'advice' (not advice, I know!) or suggestions?
Cheers

eskbanker

Personally I'd stick to AJ Bell or perhaps HL, as they're mainstream platforms supporting a wide range of generally-available products, rather than a small set of opaque proprietary offerings. I wouldn't discount HL simply on the basis of their flawed backing for Woodford, but they're renowned as a costlier alternative to other mainstream platforms, so I'd lean towards AJB of those two, and opt for standard funds (that are readily researched) rather than their own.

Nutmeg and Moneybox are usually derided on here for their gimmicky frills, lack of investment choices and high costs.

cfw1994 wrote: »

Trying to help our uni-age children to chose a S&S LISA - thinking S&S since this is likely a 5-10+ year thing. They already have small regular Vanguard ISAs running with a little "ready-access" money should it be needed in the future: this would be more for future house or obviously 'pension supplement'

Finally, are you really sure that uni-age children are unlikely to be looking to get on the property ladder within 5-10 years? Sticking to cash LISAs may be a better bet at this stage, switching to S&S ones for long-term retirement planning after buying....

cfw1994

eskbanker wrote: »

Personally I'd stick to AJ Bell or perhaps HL, as they're mainstream platforms supporting a wide range of generally-available products, rather than a small set of opaque proprietary offerings. I wouldn't discount HL simply on the basis of their flawed backing for Woodford, but they're renowned as a costlier alternative to other mainstream platforms, so I'd lean towards AJB of those two, and opt for standard funds (that are readily researched) rather than their own.

Nutmeg and Moneybox are usually derided on here for their gimmicky frills, lack of investment choices and high costs.

Finally, are you really sure that uni-age children are unlikely to be looking to get on the property ladder within 5-10 years? Sticking to cash LISAs may be a better bet at this stage, switching to S&S ones for long-term retirement planning after buying....

Thanks
Yes, you could be right on the cash LISA thinking...not sure....will have a think!
I wonder if LISAs can be switched from cash to S&S (or vice versa). I'm guessing with the limited number of providers offering them, probably not. Just thinking if they (for whatever reason) do not buy a house before the age limit.....might want to shift to S&S for longer term to 'pension' age!

eskbanker

cfw1994 wrote: »

I wonder if LISAs can be switched from cash to S&S (or vice versa). I'm guessing with the limited number of providers offering them, probably not.

This is allowed by the ISA rules, but some of the LISA providers have previously chosen not to accept any LISA transfers, not sure if that's still the case.

cfw1994 wrote: »

Just thinking if they (for whatever reason) do not buy a house before the age limit.....might want to shift to S&S for longer term to 'pension' age!

What age limit? I'm aware of age limits on opening one (18 to 39) and accessing funds penalty-free other than for a first property purchase (from 60), but your wording implies an upper limit on using one, which I'm not aware of....

cfw1994

eskbanker wrote: »

This is allowed by the ISA rules, but some of the LISA providers have previously chosen not to accept any LISA transfers, not sure if that's still the case.

What age limit? I'm aware of age limits on opening one (18 to 39) and accessing funds penalty-free other than for a first property purchase (from 60), but your wording implies an upper limit on using one, which I'm not aware of....

Badly worded: I meant the fact that should they NOT buy a home before 40, then the funds would sit for 20 years, so would be ripe for stock market investment over cash!!

cheers

Alexland

They can still use the LISA including bonus for a qualifying property purchase after 40. They just have to open the account with an initial deposit before 40. They can add money into the account and receive bonuses until 50.

But yes if they are a long way away from using the money then a S&S LISA would be more suitable with HL (small regular fund trades) or AJ Bell (best for occasional large lump sum trades) or maybe Nutmeg (easy but loss making company).

Alex

cfw1994

Alexland wrote: »

They can still use the LISA including bonus for a qualifying property purchase after 40. They just have to open the account with an initial deposit before 40. They can add money into the account and receive bonuses until 50.

But yes if they are a long way away from using the money then a S&S LISA would be more suitable with HL (small regular fund trades) or AJ Bell (best for occasional large lump sum trades) or maybe Nutmeg (easy but loss making company).

Alex

Ahh, good point, thanks: I hadn't clocked that they could use it provided it was started (lazy reading:o)

Your summary sounds good: Nutmeg worries me for long term investment (how long does a loss-making company keep going (mind you, Tesla lost $2Bn last year, apparently:eek:).
So for monthly investments, sounds like HL may be better than AJBell....

(or whether to go with lower risk but lower potential benefit cash!)

Alexland

Nutmeg keeps going because every few years someone pumps in tens of millions hoping they will grow their assets under management enough to become profitable in future. The latest bail-out came from Goldman Sachs.

https://www.nutmeg.com/nutmegonomics/goldman-sachs/

Nutmeg have over £1bn under management but even then it's hard to make a profit up against HL who are around 100x the size - or maybe a bit less after the Woodford mess. Still you are allowed to be a HL customer, not invest with Woodford (or the expensive HL inhouse funds) and go mostly passive.

If going with financially secure DIY platforms then HL are better for regular LISA investments as although they charge a 0.45% annual platform fee (compared to AJ Bell YouInvest at 0.25%) they do not charge any fund trade fees (£1.50 at AJB) to invest the contribution or bonus (when added a month or two later) into funds.

AJB works well if you only make one lump sum contribution and assocaited bonus per tax year (so only incuring 2x £1.50 fees) especially if using the maximum annual allowance.

Also to offset the higher paltform fee HL offer attractive discounts on selected funds such as the Blackrock Consensus 85 mixed asset fund discounted to just 0.09% which is circa 0.10% cheaper than anything similar on AJ Bell.

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/b/blackrock-consensus-85-class-i-accumulation

Alex

Azamfb

I want to know if I use only day half the balance to use as a mortgage deposit then would the isa still be open and would I then get the money when I’m 60?