Lifetime ISAs guide

anewman

Mick70 said:

If its the lifetime ISA , which providers are offering best ones ?   I currently have £10k saved for her but the bank does not do Lifetime ISA , so i'm assuming i could transfer £4k pa over and do this each year?

Lifetime ISA is probably the best option, so long as it's being saved as a deposit for a house. Can't really beat a "free" £1k each year when saving £4k, and interest is paid on the full amount including the bonus. Best buys are always listed here https://www.moneysavingexpert.com/savings/lifetime-isas/#bestbuys

anewman

TheTrotsky said:

anewman said:

Initiated a transfer to Nottingham Building Society over 30 working days ago. Received confirmation the account was closed from the old provider. Balance still states £0. Contacted them to query this and had zero response.

Thought it was just me and that I must be going mad! Absolutely appalling customer service and totally cavalier attitude to handling other people's money. All my son and daughter want is an acknowledgement that they've received the money but they've just completely blanked repeated requests and yet they have the time to send written acknowledgment of complaints my son and daughter have filed with the Financial Ombudsman! 

My transfer has now completed. A letter from the old provider said they sent a new cheque, claiming Nottingham didn't receive the first one. The lack of communication from Nottingham is worrying though. Incidentally, using the secure messages feature when logged into the account seems to give the best chance of getting a reply.

anewman

kelis_2 said:

Apologies if this has been asked before, or if I am asking in the wrong place...my daughter opened a LISA last year with Moneybox, to save for a first time house purchase. It now looks like her first house purchase will be jointly with her boyfriend who is already on the property ladder. My question is, will she be allowed to use the LISA for her half of the purchase,  as she will be a first time buyer, but he won't be? Thank you 😊 

"Can I use the Lifetime ISA to buy a home with someone else?

Yes! You can use your LISA to buy a home with another person regardless of whether or not they’re also a first time buyer.

You can also use the LISA to buy with another LISA holder, or someone who holds a Help to Buy ISA. Please note, however, that the £450,000 price limit on the home you buy does not increase if two or more LISAs are used for the same property purchase." https://www.moneyboxapp.com/faqs/lisa/buying-house-with-someone-else/

tinker45

Hi Folks,
If I open a LISA now (to start the 1 year clock ticking) but I don't put any money in until say, March (so as to align with the end of the tax year but also means I know better if I will buy before the 1 year minimum) - would I still get the full government bonus?
Naturally I know I won't get the interest, but trying to understand, if the bonus is paid out in chunks or if I invest the full annual amount right at the end of the tax year if I simply get the full bonus too?
Similarly, if I know for sure we will buy after the 1 year mark and say I  put in 4k in March (this tax year) and 4k in April (next tax year) would I quite quickly have the full bonus?
Thanks!

grumiofoundation

tinker45 said:

Hi Folks,
If I open a LISA now (to start the 1 year clock ticking) but I don't put any money in until say, March (so as to align with the end of the tax year but also means I know better if I will buy before the 1 year minimum) - would I still get the full government bonus?
Naturally I know I won't get the interest, but trying to understand, if the bonus is paid out in chunks or if I invest the full annual amount right at the end of the tax year if I simply get the full bonus too?
Similarly, if I know for sure we will buy after the 1 year mark and say I  put in 4k in March (this tax year) and 4k in April (next tax year) would I quite quickly have the full bonus?
Thanks!

I believe all the lifetime isa providers have a minimum pay in - but this will be small (e. g. Moneybox is £1)

The bonus is paid out roughly between 1 and 2 months after you make deposit (depends exactly when in month pay - see link). 

You can pay in this years remaining lifetime ISA allowance (£4000-initial deposit) before end of this tax year* and then £4000 next April you would have both bonuses paid within 2 months. 

But since you cant use to buy house until next October earlier you have don’t have to worry about exact timeline if you pay in next April. 

Exactly when bonus paid explained here 
https://www.skipton.co.uk/savings/isas/lifetime-isa/faqs

*Edit - don't leave it too late as the providers cut offs will likely be earlier than the end of the tax year. You can look up threads of people who missed this cut off and the contributions counted as the next tax year. 

rachlikeswinter

tinker45 said:

Hi Folks,
If I open a LISA now (to start the 1 year clock ticking) but I don't put any money in until say, March (so as to align with the end of the tax year but also means I know better if I will buy before the 1 year minimum) - would I still get the full government bonus?
Naturally I know I won't get the interest, but trying to understand, if the bonus is paid out in chunks or if I invest the full annual amount right at the end of the tax year if I simply get the full bonus too?
Similarly, if I know for sure we will buy after the 1 year mark and say I  put in 4k in March (this tax year) and 4k in April (next tax year) would I quite quickly have the full bonus?
Thanks!

Yes - you can put £4000 in the account up to the 5th April, using the full allowance for 20/21. You'll get the £1000 bonus around 14 days after the 20th April (give or take - your provider would confirm that). Then you can put a further £4000 in the account on 6th April, using the full allowance for 21/22. You'll get that bonus around 14 days after the 20th May. So roughly by the end of May 2021 you would have £10,000 in the account, £2,000 of which is bonus. You wouldn't be able to deposit any more money until the 6th April 2022. This is mostly how I've been operating my LISA, making the most of regular saver accounts instead.

FYI you would probably need to fund the account with a nominal £1, if you do open it. So realistically you'd transfer £3999 before 5th April. And, as you say, you wouldn't get much in the way of interest, but it's negligible these days anyway.

grumiofoundation

rachlikeswinter said:

tinker45 said:

Hi Folks,
If I open a LISA now (to start the 1 year clock ticking) but I don't put any money in until say, March (so as to align with the end of the tax year but also means I know better if I will buy before the 1 year minimum) - would I still get the full government bonus?
Naturally I know I won't get the interest, but trying to understand, if the bonus is paid out in chunks or if I invest the full annual amount right at the end of the tax year if I simply get the full bonus too?
Similarly, if I know for sure we will buy after the 1 year mark and say I  put in 4k in March (this tax year) and 4k in April (next tax year) would I quite quickly have the full bonus?
Thanks!

Yes - you can put £4000 in the account up to the 5th April, using the full allowance for 20/21. You'll get the £1000 bonus around 14 days after the 20th April (give or take - your provider would confirm that). Then you can put a further £4000 in the account on 6th April, using the full allowance for 21/22. You'll get that bonus around 14 days after the 20th May. So roughly by the end of May 2021 you would have £10,000 in the account, £2,000 of which is bonus. You wouldn't be able to deposit any more money until the 6th April 2022. This is mostly how I've been operating my LISA, making the most of regular saver accounts instead.

FYI you would probably need to fund the account with a nominal £1, if you do open it. So realistically you'd transfer £3999 before 5th April. And, as you say, you wouldn't get much in the way of interest, but it's negligible these days anyway.

Edited post above as well - don't leave it this late as the providers cut offs will likely be earlier than the end of the tax year. 

rachlikeswinter

grumiofoundation said:

rachlikeswinter said:

tinker45 said:

Hi Folks,
If I open a LISA now (to start the 1 year clock ticking) but I don't put any money in until say, March (so as to align with the end of the tax year but also means I know better if I will buy before the 1 year minimum) - would I still get the full government bonus?
Naturally I know I won't get the interest, but trying to understand, if the bonus is paid out in chunks or if I invest the full annual amount right at the end of the tax year if I simply get the full bonus too?
Similarly, if I know for sure we will buy after the 1 year mark and say I  put in 4k in March (this tax year) and 4k in April (next tax year) would I quite quickly have the full bonus?
Thanks!

Yes - you can put £4000 in the account up to the 5th April, using the full allowance for 20/21. You'll get the £1000 bonus around 14 days after the 20th April (give or take - your provider would confirm that). Then you can put a further £4000 in the account on 6th April, using the full allowance for 21/22. You'll get that bonus around 14 days after the 20th May. So roughly by the end of May 2021 you would have £10,000 in the account, £2,000 of which is bonus. You wouldn't be able to deposit any more money until the 6th April 2022. This is mostly how I've been operating my LISA, making the most of regular saver accounts instead.

FYI you would probably need to fund the account with a nominal £1, if you do open it. So realistically you'd transfer £3999 before 5th April. And, as you say, you wouldn't get much in the way of interest, but it's negligible these days anyway.

Edited post above as well - don't leave it this late as the providers cut offs will likely be earlier than the end of the tax year. 

Aye - if you've got the cash available now and it's not tied up or earning mega bucks interest elsewhere, I'd probably whack it in sooner rather than later tbh. Getting the bonus is a lovely serotonin hit which we all need right now!

tinker45

Thanks all for the fast and extremely helpful replies! I should have said, I will do the £1 trick after reading it on MSE. I'll likely deposit before April; but just generally not too much before then (will have a much better idea of house buying timeline by then, and if I have a pound locked up well...oh well!)

anewman

rachlikeswinter said:
Aye - if you've got the cash available now and it's not tied up or earning mega bucks interest elsewhere, I'd probably whack it in sooner rather than later tbh. Getting the bonus is a lovely serotonin hit which we all need right now!

If you might need the money for an emergency, it's better not tied into the LISA, though. Penalty free withdrawals will end next year.