Lifetime ISAs guide

P1Fanatic

SharonSmith92 said:

Hello. Looking for some advice on my LISA please.

I have a house deposit in my LISA (plus a bit extra which would have gone towards surveyor fees, mortgage fees etc), however my LISA provider is saying that they have to transfer all funds to my conveyancer - the conveyancer has then advised that all funds have to go towards the deposit for the house. 

LISA provided advised that i can part transfer funds to conveyancer and then withdraw the rest to my account but i will get a 25% charge. 

Please can you advise if this is correct? So no savings in the LISA can be used for fees etc that come as part and parcel of purchasing a house? 

Yes you can only use it towards a 1st house purchase. Presumably as they want to ensure that is what its used for. If they start letting people use it for other associated costs it could be spent on anything. So either you use it all against the house purchase or use a % for that and keep the rest in there for retirement at 60 (would make more sense to move it to a S&S LISA for that purpose) or if you need it now take the 25% hit (which means you actually lose more than the original govt bonus paid).

masonic

You should be able to make a penalty free withdrawal to the conveyancer for less than the full balance of your account. You could then keep the remainder for retirement to avoid paying any penalty. Or, get a smaller mortgage and use the full balance towards your mortgage deposit.

Ivrytwr3

Hi, after some help for a LISA newbie please!

My son turns 18 next month and will come into some cash, he will able be off to Uni for the next 3 years. 

We would like to put £4k immediately into a stocks and shares LISA and £4k in year 2 as he won't need the cash for sometime. Or should it be a cash LISA we go for?

Can anyone advise the best provider for this please? 

eskbanker

Ivrytwr3 said:

Hi, after some help for a LISA newbie please!

My son turns 18 next month and will come into some cash, he will able be off to Uni for the next 3 years. 

We would like to put £4k immediately into a stocks and shares LISA and £4k in year 2 as he won't need the cash for sometime. Or should it be a cash LISA we go for?

Can anyone advise the best provider for this please? 

Assuming that he'll be looking to use this money towards a first-time property purchase, then, unless he won't be buying for at least five years, it would probably make more sense to stay in cash - best buy info is at https://www.moneysavingexpert.com/savings/lifetime-isas/#bestbuys

ptkloon

Hi, Would it be possible for my wife to open a LISA to aid with her retirement and put in the maximum £4k amount until she is 50 to make the most of the 25% from the government, or are there rules against it?  We already have a mortgage on our house, she is 38 and I am 41 so I understand I can't open one as I'm too old now

P1Fanatic

ptkloon said:

Hi, Would it be possible for my wife to open a LISA to aid with her retirement and put in the maximum £4k amount until she is 50 to make the most of the 25% from the government, or are there rules against it?  We already have a mortgage on our house, she is 38 and I am 41 so I understand I can't open one as I'm too old now

As long as she opens it before her 40th birthday then no issue if you are using it for retirement. However she wont be able to withdraw it until aged 60 without losing the 25% bonus (and slightly more due to the way they calculate it).

Using a LISA for retirement I would recommend opening a Stocks and Shares version for better growth over the next 22 years.

Dafyddj29

The current LISA limit of a £450,000 maximum usage towards a first home is heavily outdated. I opened up a LISA last year at the age of 18 and are planning to save in this for a few years, 5 is the target, to put this towards a first home, maxing out the the contributions each year. In 5 years time, will the LISA limit of £450k still be the same? 

Since it's introduction in 2017, house prices have risen exponentially, ~30% in some areas, and the 450k limit has seen fewer and fewer availability of good, quality housing as it used to. In a few years time, if house prices are rising at the crazy rates they are now, £450k won't even afford a 1 bedroom flat in Surrey! Are there any plans for this limit to be reviewed every several years, for example, or any other requirements for this to be looked at in the future? The government introduced this to help first-time buyers yet it's their control over inflation and property investors that has seen prices go out of control!

masonic

Dafyddj29 said:

The current LISA limit of a £450,000 maximum usage towards a first home is heavily outdated. I opened up a LISA last year at the age of 18 and are planning to save in this for a few years, 5 is the target, to put this towards a first home, maxing out the the contributions each year. In 5 years time, will the LISA limit of £450k still be the same? 

Since it's introduction in 2017, house prices have risen exponentially, ~30% in some areas, and the 450k limit has seen fewer and fewer availability of good, quality housing as it used to. In a few years time, if house prices are rising at the crazy rates they are now, £450k won't even afford a 1 bedroom flat in Surrey! Are there any plans for this limit to be reviewed every several years, for example, or any other requirements for this to be looked at in the future? The government introduced this to help first-time buyers yet it's their control over inflation and property investors that has seen prices go out of control!

Nobody knows whether or not the house price limit will be raised within the next 5 years. Nobody knows what will happen to house prices over the next 5 years. The fact that the limit hasn't been raised in 5 years doesn't bode well for it being raised in the near future. There are certainly no requirements for the limit to be raised.

Aside from the LISA limit, there will also be an upper limit to what you can afford to borrow, driven by rapidly rising interest rates.

A good property crash could help matters greatly, so here's hoping.

red_mush95

So I have a question in regards to setting myself up for a LISA.

I am a first time buyer. I have never owned my own property. My partner does own her home and I live there with her and contribute towards the cost of the mortgage. However, I do not have any claim to this property whatsoever, even though we both consider it our and our daughters home.  

Is it possible for me to open a LISA in my name for a first time purchase for us to purchase a new home together? Could we use the money from the sale of her house to contribute towards the cost of this new house alongside money from my LISA? 

Any tips or info on this would be greatly appreciated as we are considering moving to a new, bigger home before our newborn daughter starts primary school

eskbanker

red_mush95 said:

Is it possible for me to open a LISA in my name for a first time purchase for us to purchase a new home together? Could we use the money from the sale of her house to contribute towards the cost of this new house alongside money from my LISA? 

Yes to both - a first time buyer can use a LISA alongside someone who's owned before, and the LISA money itself will never be enough to fund an entire property purchase!