Lifetime ISAs guide

Alexland

rhodesmjr said:

0.5% at Moneybox vs. 0.8% at Nottingham BS almost seems with the effort for me if it's going to be a smooth process. Wonder if it would get it transferred in time to start adding to the new one in April. Thanks for any comments!

Provided you still are under 40 there is nothing stopping you opening the new LISA on 6th April and making the contribution anyway as you are allowed to hold multiple LISA accounts for different tax year contributions although some providers may request that you make no further contributions until the transfer has completed.

RoisinDove

Hello, all! I would like to open a LISA just before the end of the tax year and put 1p into it. The reason for this is that I am hoping to buy a property this year but just in case I don't, I'd like to avail of some government help and put 4K in next tax year and maybe the one after that. My understanding is the LISA needs to have been open over 12 months to use it for a property purchase so I was thinking it would be a good idea to sort it now. 
In my situation, is there a LISA option which would be good or are they all much of a muchness? 

eskbanker

RoisinDove said:

Hello, all! I would like to open a LISA just before the end of the tax year and put 1p into it. The reason for this is that I am hoping to buy a property this year but just in case I don't, I'd like to avail of some government help and put 4K in next tax year and maybe the one after that. My understanding is the LISA needs to have been open over 12 months to use it for a property purchase so I was thinking it would be a good idea to sort it now. 
In my situation, is there a LISA option which would be good or are they all much of a muchness? 

https://www.moneysavingexpert.com/savings/lifetime-isas/#bestbuys lists the two with the best rates, although interest won't be particularly relevant to you if you're just funding with a token amount - note that neither will open with literally a penny, requiring £1 or £10.  Most will evaluate savings products on rates but what does 'good' look like to you, i.e. on what basis would you compare providers?

RoisinDove

eskbanker said:

RoisinDove said:

Hello, all! I would like to open a LISA just before the end of the tax year and put 1p into it. The reason for this is that I am hoping to buy a property this year but just in case I don't, I'd like to avail of some government help and put 4K in next tax year and maybe the one after that. My understanding is the LISA needs to have been open over 12 months to use it for a property purchase so I was thinking it would be a good idea to sort it now. 
In my situation, is there a LISA option which would be good or are they all much of a muchness? 

https://www.moneysavingexpert.com/savings/lifetime-isas/#bestbuys lists the two with the best rates, although interest won't be particularly relevant to you if you're just funding with a token amount - note that neither will open with literally a penny, requiring £1 or £10.  Most will evaluate savings products on rates but what does 'good' look like to you, i.e. on what basis would you compare providers?

Thanks! I am really not sure - I guess I am really just planning to stick 4K in next tax year if I don't end up buying this year, and get my 1K from the government. That's pretty much it, so ideally I'd find something that is easy to use, minimal hassle and low required amount to open it?

cjh567

Really sorry if this isn't the right place to post this or if it has been answered before but I couldn't really read all of the posts on 242 pages of this thread!

I currently have a Barclays Help 2 Buy ISA and a Moneybox LISA (with £5 in from 2019). I have just over £4000 in my Barclays H2B and I was wondering if I'm better to move that £4000 into the LISA so I can get the £1000 bonus on that money as well as the 1.25% interest I have had monthly from Barclays? I'm sure there is some maths to work out which is the most profitable long term way of saving the money but I can't work it out myself so need some advice on the matter. 

Many thanks in advance to anyone's suggestions!

eskbanker

cjh567 said:

I currently have a Barclays Help 2 Buy ISA and a Moneybox LISA (with £5 in from 2019). I have just over £4000 in my Barclays H2B and I was wondering if I'm better to move that £4000 into the LISA so I can get the £1000 bonus on that money as well as the 1.25% interest I have had monthly from Barclays? I'm sure there is some maths to work out which is the most profitable long term way of saving the money but I can't work it out myself so need some advice on the matter. 

The HTB pays better interest so will be a better bet if you only want to pay in up to £200/month and as long as the property you eventually purchase costs no more than £250K (£450K in London).  You'll get the same 25% bonus on the money you put in, but with LISA it's added as you go, while with HTB it's only added when you're ready to buy.

https://www.moneysavingexpert.com/savings/lifetime-isas/#property-6 explains the differences in more detail....

cjh567

eskbanker said:

cjh567 said:

I currently have a Barclays Help 2 Buy ISA and a Moneybox LISA (with £5 in from 2019). I have just over £4000 in my Barclays H2B and I was wondering if I'm better to move that £4000 into the LISA so I can get the £1000 bonus on that money as well as the 1.25% interest I have had monthly from Barclays? I'm sure there is some maths to work out which is the most profitable long term way of saving the money but I can't work it out myself so need some advice on the matter. 

The HTB pays better interest so will be a better bet if you only want to pay in up to £200/month and as long as the property you eventually purchase costs no more than £250K (£450K in London).  You'll get the same 25% bonus on the money you put in, but with LISA it's added as you go, while with HTB it's only added when you're ready to buy.

Many thanks for this answer. Another question off that though. Would I get more money out of the LISA though if I'm gaining the 25% bonus money each month ontop of the interest already earned?

masonic

cjh567 said:

eskbanker said:

cjh567 said:

I currently have a Barclays Help 2 Buy ISA and a Moneybox LISA (with £5 in from 2019). I have just over £4000 in my Barclays H2B and I was wondering if I'm better to move that £4000 into the LISA so I can get the £1000 bonus on that money as well as the 1.25% interest I have had monthly from Barclays? I'm sure there is some maths to work out which is the most profitable long term way of saving the money but I can't work it out myself so need some advice on the matter. 

The HTB pays better interest so will be a better bet if you only want to pay in up to £200/month and as long as the property you eventually purchase costs no more than £250K (£450K in London).  You'll get the same 25% bonus on the money you put in, but with LISA it's added as you go, while with HTB it's only added when you're ready to buy.

Many thanks for this answer. Another question off that though. Would I get more money out of the LISA though if I'm gaining the 25% bonus money each month ontop of the interest already earned?

You only receive the 25% bonus once for each £1 in your LISA, just the same as the HTB ISA bonus. Wouldn't it be wonderful if you got 25% per month on the whole balance!

eskbanker

cjh567 said:

eskbanker said:

cjh567 said:

I currently have a Barclays Help 2 Buy ISA and a Moneybox LISA (with £5 in from 2019). I have just over £4000 in my Barclays H2B and I was wondering if I'm better to move that £4000 into the LISA so I can get the £1000 bonus on that money as well as the 1.25% interest I have had monthly from Barclays? I'm sure there is some maths to work out which is the most profitable long term way of saving the money but I can't work it out myself so need some advice on the matter. 

The HTB pays better interest so will be a better bet if you only want to pay in up to £200/month and as long as the property you eventually purchase costs no more than £250K (£450K in London).  You'll get the same 25% bonus on the money you put in, but with LISA it's added as you go, while with HTB it's only added when you're ready to buy.

Many thanks for this answer. Another question off that though. Would I get more money out of the LISA though if I'm gaining the 25% bonus money each month ontop of the interest already earned?

Not at currently available LISA interest rates, no.

In simple terms, you're comparing HTB's 1.25% of £4K (£50) with LISA's 0.85% of £5K (£42.50) in year one, but there are some complications if you get into more detail, such as the fact that the delay in getting the LISA bonus means a quid or two less there, and also the fact that the HTB bonus ultimately paid will be 25% of £4,050, i.e. an extra £12.50.  These comparisons are based on a year, but longer periods could give different answers and nobody knows how the differential between the interest rates will play out.

Not a huge amount in it though, either way round....

squiz18

Quick question, I've just opened a Lisa with AJ Bell, and deposited £2000. I haven't invested it yet but presumably this still counts as this years allowance and I would be able to put in £4000 next year?

And i will get the government top up on the £2000 even if I keep the money in the cash account without investing it? 

I'm just trying to work out the most efficient way to invest it (drip feed or lump sum) and am conscious of the end of year coming up.