Lifetime ISAs guide

Est.1882

DSA wrote: »

For those looking to purchase a house in just over a year from now, is the advice to invest in a S&S LISA ASAP "to start the clock ticking", and then transfer to a cash LISA when they become available

This is basically what I am planning to do.
Just wanted to clarify:
- If I invest the minimum into a S&S LISA then transfer to a cash LISA later in the year am I still able to add funds to it from both transferring my Help-to-Buy ISA and up to the £4000 limit?
- If I open a S&S LISA I can still add other funds to a regular S&S ISA, and similarly I can add to a Cash ISA (In my case my Help-to-Buy) alongside a Cash LISA?

Thanks

R

daaave

Forrest87 wrote: »

After much research, my plan of approach for my son is as follows:

On April 6th, open a LISA with Hargreaves & Lansdown and immediately transfer his full H2B balance closing the account.

I have then decided to invest in a Vanguard LifeStrategy 100% Equity Accumulation (GBP) Fund and continue to contribute monthly on that basis.

I will most likely split his H2B balance (just shy of £4,300) into 12 increments and spread them over the 12 months along with any new contributions.

The ongoing fees are only 0.22% and given that he's only 19, I'm prepared to go with the 100% equity risk approach. I add, this is just for Retirement savings as he can't use the LISA to purchase a property.

Any thoughts?????

You're organizing your son's pension for him?

On one level that's really nice, on another level it's serious parental overreach.

Is it not better to engage him in the process and allow him to make his own decisions? eg, A stakeholder pension set-up may be more appropriate if you did want to contribute towards his retirement - AIUI, if he has money in a LISA and at some point becomes unemployed and applies for benefits, he'll have to declare it (and probably withdraw from it). He needs to fully understand what he's signing up for and decide for himself if it's the most appropriate thing to do.

Also, if he does go for the LISA, it's surely better that he develops a basic understanding of investment himself, right?

masonic

DSA wrote: »

1) The MSE guide here states that the minimum investment with Nutmeg is £100 lump sum, however Nutmeg's website appears to suggest that it is £500, with an additional recurring contribution of £100 per month for investments below £5000. Which is correct? (are there special terms for their LISA product?)

I don't know if MSE has special information about this product not available to the public, but I'd tend to go with the information on Nutmeg's own website.

2) For those looking to purchase a house in just over a year from now, is the advice to invest in a S&S LISA ASAP "to start the clock ticking", and then transfer to a cash LISA when they become available correct. Clause 1.28 bullet point 3 refers of the Lifetime ISA: Updated design note:

"Where an individual withdraws savings from a Lifetime ISA to make a first home purchase, the withdrawal must be at least 12 months after the first subscription into the Lifetime ISA. This 12 month period applies to each Lifetime ISA account that an individual opens and equally applies to funds transferred from a Help to Buy: ISA." (My bold)

Does this mean that the clock restarts if you transfer to a Cash LISA, or if you transfer in a HTB:ISA?? My understanding is that in order to transfer funds to a new ISA you have to "open a new account" with the new provider first. Many thanks.

A transferred LISA is not a new account. The first subscription to the original account is used to determine the age of the LISA. If the transfer from a HTB ISA is not the first subscription (i.e. you put money in prior to that), then it does not make any difference.

Est.1882 wrote: »

This is basically what I am planning to do.
Just wanted to clarify:
- If I invest the minimum into a S&S LISA then transfer to a cash LISA later in the year am I still able to add funds to it from both transferring my Help-to-Buy ISA and up to the £4000 limit?

Yes

- If I open a S&S LISA I can still add other funds to a regular S&S ISA, and similarly I can add to a Cash ISA (In my case my Help-to-Buy) alongside a Cash LISA?

Yes, the four types of ISA in the 2017/18 tax year are:

Cash (including HTB)
S&S
IF
LISA

DRY411S

My daughter holds a UK passport but currently rents and works in Germany. Her long term plan is to come back to UK and buy a property.

I note that LISA can only be opened by people who live in the UK. Is there a legal definition of this please?

dan.ashbridge

If you for whatever reason lost your job and had no money to put in to your LISA for a period of time, what would happen?

Mr.Boy

Sorry for what must have been asked already but there's 19 page in this thread (maybe a FAQ would be good?)

Is a LISA entirely separate to a normal ISA i.e. I can max out both each year? Or does it count as part of the 15/20k allowance?

ben_harding10

I have a few questions:

1) Transfers- what are the rules (are there any on transferring my LISA cash park from one provider to another, and in-between cash to stocks and shares or vice versa?

2) If I invest £4000 into the stocks and shares LISA, and the funds lose money, where do the government take the percentage and how much would I get from them? i.e £4000 invested, lowers to £3750 before end of tax year, govt. either pays 25% on original pay-in but delays payment to the end of tax year, or gives 25% on max £4000. Should be the first option if you don't get 25% on additional money earned in stocks but need clarification.

3) Will cash LISAs have interest from the provider attached akin to other ISAs or is the govt. payout the only addition you get? i.e Skipton BS could give 1% on £4000 (could even only pay 1% on up to figures like £2000).

martinlewisjunior

To keep this brief.

Stage 1: Open stocks and shares LISA with nutmeg tomorrow. (put £100 or £500) at risk 1.
Stage 2: When cash ISA's open, transfer NUTMEG Lisa into a cash isa, at the same time also transfer help to buy cash isa into this cash isa. (or transfer help to buy isa later depends on interest rates)
Stage 3: come April 6th 2018 , become eligible for 25% bonus. Ready to purchase a house come the late spring/ summer of 2018

I guess I'm right in thinking this?

Mature-Student

Hi

I am considering getting my 19yo daughter to open up either a HTB ISA or a LISA that her Dad and I will pay into (max £2k a year) until she starts earning herself (she's at Uni just now). Is this allowed?

Also, I see that she's not eligible if she already owns property, including through inheritance. As our only child, she will inherit the family home should something happen to us, along with my share of my Mum's property once she passes on. Our daughter is also a one third beneficiary in her grandparents will which includes a small home. What would happen if she had a HTB or LISA and subsequently inherited property? Would the bonus amounts be clawed back?

Thanks.

bowlhead99

d000hg wrote: »

Sorry for what must have been asked already but there's 19 page in this thread (maybe a FAQ would be good?).

There's fewer pages if you change your settings to show more per page

Nobody wants to read the MSE article or FAQ or existing articles by other websites or the technical overview documents produced by government that explain how it works or the full and exhaustive regulations or the many detailed threads. They just want to say I have these three things I'm not sure about, what's the answer for the subtleties of my specific situation.

So, no wonder the "guide" thread gets long when nobody does their own research or even reads the article the discussion thread is based on or any of the replies provided in the discussion thread, and just fires up a new question with the words in a different order to the last time it was asked...

If you had to list most of the different things people were curious about, from tens of millions of people around the country, you would end up spending a few pages explaining it (see the govt's technical explanation pdf). Or if you wanted to cover every technicality you'd put it in legalese and add it to legislation (see the full regulations).

Is a LISA entirely separate to a normal ISA i.e. I can max out both each year? Or does it count as part of the 15/20k allowance?

LISA is one of the four main types of ISA:

Cash ISA
S&S ISA
IF ISA
L ISA

There are sub-types, eg:

Cash ISAs can be instant access cash ISAs or fixed deposit cash ISAs or regular saver cash ISAs or Help to Buy ISAs.

And LISAs can be in a cash deposit flavour from a bank or building society, or an investment flavour from an investment firm.

But there are 4 main flavours. You can contribute to one of each of the 4 types to a maximum of £20,000 in 2017/18.

Some of them will have their own individual product limits, such as a HTB cash ISA is max £1000 on account opening and £200 pcm, no matter where you transfer the money in from. Likewise the LISA has its own limit, max £4000 not counting prior year HTB balances transferred in during 2017/18 or transfers from other LISAs.

Any transfers between the types, of current or prior year money (where allowed by the specific product type) do not affect the £20,000 but may affect the individual product limit.