Lifetime ISAs guide

EnglishPhil

Apologies if this seems a daft question, but from what I understand £1 paid into a LISA today followed by £3999 in March will see a £1000 bonus payable (subject to the criteria etc.) on an average balance of around £2.50 for the whole year. Is that right?

eskbanker

EnglishPhil wrote: »

Apologies if this seems a daft question, but from what I understand £1 paid into a LISA today followed by £3999 in March will see a £1000 bonus payable (subject to the criteria etc.) on an average balance of around £2.50 for the whole year. Is that right?

Yes, you could strictly pay in the £3,999 on 5 April 2018 and receive the £1,000 bonus later in the month (or maybe early May) - it's a bonus rather than interest and so isn't proportional to the length of time involved.

Likewise, when bonuses are payable monthly from the 2018/19 tax year, the turnaround time from contribution to bonus will be very small even for those not trying to optimise it!

CrustyB

I created a cash LISA a month ago and wanted to open a normal cash ISA (and transfer the funds from an old cash ISA into it) and was told by the people at charter savings bank that I can't put money into a cash LISA and a normal cash ISA in the same year, from what I've read that isn't correct but if that's what they're saying then what am I supposed to do?

darren72

CrustyB wrote: »

I created a cash LISA a month ago and wanted to open a normal cash ISA (and transfer the funds from an old cash ISA into it) and was told by the people at charter savings bank that I can't put money into a cash LISA and a normal cash ISA in the same year, from what I've read that isn't correct but if that's what they're saying then what am I supposed to do?

Yes, they are different products so you can put money into both.

Just ignore them and go ahead regardless.

joehfax

Hi

Both me and my girlfriend opened a LISA yesterday 21-06-2017, will we have to save the £4000 before april to maximise the Gov contributions or is is a year from the date opened i.e. 21-06-2018.

Also I have read that from next year the contributions will be paid on a monthly basis rather that annually, would this mean that once my first year is up, would I be about to put the max for the year in £4000 in the first month of next year to receive the Gov's max contribution or is there going to be a monthly maximum as we are looking to buy next summer.

Thanks

Joe

eskbanker

The allowances are aligned with tax years so you can each pay in up to £4K anytime between now and 5 April 2018 (bonus payable late April/early May 2018), and then another £4K anytime between 6 April 2018 and 5 April 2019 (bonus payable the following month).

So, if you're buying next summer (must be after June 2018 as the accounts have to be open for at least a year) then you can pay in £16K between you and have that topped up to £20K, plus any interest or investment growth....

Big_Al2017

Hi

Hoping someone can help me and my partner with our questions as I've now confused myself?

1. We both have a HTB LISA and opened a Share Center S&S LISA when they launched, can we open a Skipton Cash LISA and transfer our S&S LISA into it?
2. How do i do this and close the S&S LISA down so i don't have 2 LISA's thus not qualifying for the bonus?
3. We want to buy as soon as the first bonus is paid, i read that you need to have the LISA open for a year, is that with one provider or just in general as i want to transfer to a Cash LISA?
3. I have over 4k in my HTB LISA, can i transfer it all into the Skipton Cash LISA and what's the latest i can do this to maximize the interest on received on the HTB account and be able to save 8k in my Cash LISA this year?

Many thanks for your help.

Ed-1

Big_Al2017 wrote: »

1. We both have a HTB ISA and opened a Share Center S&S LISA when they launched, can we open a Skipton Cash LISA and transfer our S&S LISA into it?

Yes - you can transfer a LISA into another LISA but all current year payments need to be transferred, like with any other ISA transfer.

Big_Al2017 wrote: »

2. How do i do this and close the S&S LISA down so i don't have 2 LISA's thus not qualifying for the bonus?

You need to fill in Skipton's S&S ISA transfer form once you have your Skipton LISA opened.

http://www.skipton.co.uk/~/media/skipton-co-uk/pdf/savings/stocks-and-shares-transfer-form.ashx?la=en-GB

Big_Al2017 wrote: »

3. We want to buy as soon as the first bonus is paid, i read that you need to have the LISA open for a year, is that with one provider or just in general as i want to transfer to a Cash LISA?

Regulation 6(11) of the Schedule to these regulations
http://www.legislation.gov.uk/uksi/2017/466/pdfs/uksi_20170466_en.pdf
states that:

(11) The account investor’s Lifetime ISA from which the withdrawal is made must have been open for at least 12 months after the date of the first payment into it and, for this purpose, a Lifetime ISA opened in the circumstances provided for in regulation 12B(5) is to be treated as being the same Lifetime ISA as the one from which the moneys transferred or paid into the account originated.

Big_Al2017 wrote: »

4. I have over 4k in my HTB ISA, can i transfer it all into the Skipton Cash LISA and what's the latest i can do this to maximize the interest on received on the HTB account and be able to save 8k in my Cash LISA this year?

You can only pay £4,000 into your LISA by 5th April 2018.

Anything you paid into your H2B ISA by 5th April 2017 does not count towards the LISA limit once transferred across to your LISA. Anything paid into the H2B ISA from 6th April 2017 does count towards the £4,000 LISA limit once transferred across. You can pay in another £4,000 from 6th April 2018.

CatGilmurray

Obvious question but I can't find an answer and I'm in a quandry as to whether to save in a (cash) Lifetime Isa or Help to Buy.. There are reports that with the interest rate being so poor in a Lifetime Isa, despite the fact you can put bigger lump sums in than with a Help to Buy, you would still eventually lose out compared to the H2B with biggest ineterst rates. Is this true? I would have enough for a healthy deposit for my first home, so I'm not too bothered about not being able to use the H2B for that, and I'm looking a couple of years down the line, so I'm not bothered about the money being held in the Lifetime Isa for a year either. My problem is working out whether my money would be better off in a H2B where you can put less in, or a Lifetime Isa where you can save more but have a very low interest rate. I have a poorly paid job, but savings, some of which are in accounts that have good interest rates, up to a limit, and I want to save the rest in one of theses. Can anyone advise me??

sybil44

Hi,
I have twin boys who have just turned 16 and an 18 year old. I would like to save for their first houses. where we live this will be more than the £250,000 limit so a lisa will be better but you have to be 18 for a lisa . I want to save exactly the same for all of them. so can I open them all a help to buy isa now and transfer all 3 of them to a lifetime isa in 2 years time when they are all 18 or over? the only info I can find is transferring a help to buy isa to life time isa by April next year but i need to wait till May 2019 to transfer because of the age constraints is still possible to swap after 2 years.
Thanks in advance
Sybil