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Lifetime ISAs guide

edited 14 May 2018 at 12:33PM in ISAs & Tax-free Savings
2.4K replies 370.7K views
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  • So, if I open an HTB later this month and contribute the maximum I.e. £1000 + £200 x 12 = £3400.

    Then if I transfer to a LISA in April '17, the 25% £850 HTB bonus will only become available when I purchase my first property but will not be added to the account in the meantime.

    Unlike the LISA bonuses which are added to the account annually?
  • As somebody who has already go onto the mortgage wheel I'd only be able to take advantage of this for saving for retirement.

    As I am currently stashing whatever I can afford into ISAs toward retirement because I fully intend to stop work before I can legally access my pensions the Lifetime ISA at a glance looked amazing - then I saw the age 60 part and penalties. :mad:

    What I really need to know once this is launched is what guarantees would we have that we really can access our cash without penalties at 60 or is this going to be another ever increasing age target?

    What I would like to try to push in the consultation is the idea that penalties should not apply to withdraw cash from a much younger age - 50 seems fair given after 50 the government wouldn't add any further bonus.

    Does anyone know whether the public will be able to feed into the consultation? If not could MSE gather our points and make them?
  • masonicmasonic Forumite
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    flubberfig wrote: »
    What I really need to know once this is launched is what guarantees would we have that we really can access our cash without penalties at 60 or is this going to be another ever increasing age target?
    There are no guarantees. Just like there are no guarantees about state pension age.
    What I would like to try to push in the consultation is the idea that penalties should not apply to withdraw cash from a much younger age - 50 seems fair given after 50 the government wouldn't add any further bonus.

    Does anyone know whether the public will be able to feed into the consultation? If not could MSE gather our points and make them?
    It is unlikely any Government is going to incentivise people to leave the workforce more than 10 years before their state pension age. People qualifying for the LISA will likely not be able to access any personal pensions before 60, perhaps they will have to wait even later.

    I plan to fund the first few years of my retirement from a normal S&S ISA. That doesn't seem like much of a hardship, really.
  • masonic wrote: »

    It is unlikely any Government is going to incentivise people to leave the workforce more than 10 years before their state pension age. People qualifying for the LISA will likely not be able to access any personal pensions before 60, perhaps they will have to wait even later.

    I expect that 60 or even later is the likelihood too. However I don't see why the government shouldn't incentivise leaving the workforce before pension age - it frees up jobs and assuming that the person leaving the workforce is able to fund their lifestyle (for example with LISA savings) should have no negative affect on them.
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  • colstencolsten Forumite
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    flubberfig wrote: »
    I expect that 60 or even later is the likelihood too. However I don't see why the government shouldn't incentivise leaving the workforce before pension age - it frees up jobs and assuming that the person leaving the workforce is able to fund their lifestyle (for example with LISA savings) should have no negative affect on them.

    Do you have evidence that jobs older people leave will go to younger ones? Ask some eminent economists and they would tell you about the lump of labour fallacy.

    As I am in my sixties now, I am unlikely to be around to see the effects of LISA on society but I firmly believe it is not a taxpayer-subsidised early retirement scheme. If you want to retire before you can draw your occupational or state pension or both, you have to make this happen on your own accord. It's not impossible to achieve and I would encourage everybody to aim for it.
  • masonicmasonic Forumite
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    flubberfig wrote: »
    I expect that 60 or even later is the likelihood too. However I don't see why the government shouldn't incentivise leaving the workforce before pension age - it frees up jobs and assuming that the person leaving the workforce is able to fund their lifestyle (for example with LISA savings) should have no negative affect on them.
    The Government needs as many people capable of work and of working age to be in paid employment. It needs them to work and pay taxes on their income. People who go economically inactive will start contributing less in taxes and may well have fewer assets beyond state pension age that can be used to pay for their care late in life, or perhaps retiring earlier will mean that they end up getting a larger means tested state pension - who knows what is on the cards.

    If you are seriously intending on spending your time and energy trying to persuade the Government to let you have access to your LISA, complete with bonus and without penalty, at 50 then good luck, but I think you are wasting your time.
  • blue_mangoblue_mango Forumite
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    I would like to open a help to buy isa and then transfer it to LISA. Possible, right? When I'm opening HTB isa, is it okay to let the bank know about my plans to transfer it later on?
  • masonicmasonic Forumite
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    blue_mango wrote: »
    I would like to open a help to buy isa and then transfer it to LISA. Possible, right? When I'm opening HTB isa, is it okay to let the bank know about my plans to transfer it later on?
    Yes it is possible. Why tell your bank? It's unlikely they will be fully up to speed on the changes coming into effect this coming Wednesday, let alone changes that are planned in a years time.
  • King_NothingKing_Nothing Forumite
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    Yeah, they had 9 months to prepare for the HTB ISA's starting and when I went in to open one in December they didn't have a clue.
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