Lifetime ISAs guide

quarky

Is the age limit 40 for both men and women? I read on another thread that there was a slightly different age limit for women?

colsten

quarky wrote: »

Is the age limit 40 for both men and women? I read on another thread that there was a slightly different age limit for women?

There is absolutely no difference. You don't by any chance have a link to the thread where it was mentioned? It needs correcting.

asc1991

There needs to be some maths done on this....

The 25% is great, especially if Halifax give 4% pa. like they did with the Help to Buy. That 4% also applies to the 25% annual bonus.

However my funding circle account yields about 12% (but let's be conservative and say 8% as it's never a guaranteed amount). Because you only get the 25% once for every £ you put into the lifetime ISA - it means the longer I have the account the worse the deal is.

Assuming a 4% interest from the bank + 25% annual government bonus (only on the money payed in that year)
Year 1 you'd make 29%
Year 2 you'd make 14.9%
Year 3 you'd make 10.9%
and so on and so forth, essentially the annual amount you make decreased every year.

I'll have to do some maths to determine how long it would take for the Lifetime ISA to be less beneficial than alternative investments.

Hope this makes sense to you all.

jimjames

asc1991 wrote: »

I'll have to do some maths to determine how long it would take for the Lifetime ISA to be less beneficial than alternative investments.

Hope this makes sense to you all.

If you are looking long term then you shouldn't be using cash but S&S instead. It also depends on your tax rate so if you're a 40% taxpayer then you'll get a better return using a pension. The 25% bonus is just an equivalent to tax relief on contributions and you're making the mistake of comparing wrappers against investments.

eskbanker

asc1991 wrote: »

There needs to be some maths done on this....

<snip>

Assuming a 4% interest from the bank + 25% annual government bonus (only on the money payed in that year)
Year 1 you'd make 29%
Year 2 you'd make 14.9%
Year 3 you'd make 10.9%
and so on and so forth, essentially the annual amount you make decreased every year.

I'll have to do some maths to determine how long it would take for the Lifetime ISA to be less beneficial than alternative investments.

When you do your maths, you'll hopefully realise that the annual amount you make doesn't decrease every year! The percentage might but the amount doesn't (assuming no withdrawals or interest/bonus rate changes of course).

asc1991

Indeed - total interest will actually increase as your bank will be giving you interest. But percentages are what is important. Total yield in £ is a pretty useless measure. For example at the start of it having £1000 earnt from £4000 is amazing. However If you had this for the full 42 years... making £1000 per year from £168000 is pretty poor.

supermankelly

Since the 25% is only paid until 50 what is the point of 40s and over not qualifying.

If you sign up at 48 then get the benefit for 2 years only. So whats the point of a 40 year old no getting this ISA.

I just turned 40 and like many (who spend the 20s travelling the world) we can't afford to buy until later in life so this is a bit unfair, right.

:money:

Archi_Bald

supermankelly wrote: »

Since the 25% is only paid until 50 what is the point of 40s and over not qualifying.

The point is that the taxpayer does not have to pay out 25% to all those who are over 40 when the LISA starts.

supermankelly wrote: »

I just turned 40 and like many (who spend the 20s travelling the world) we can't afford to buy until later in life so this is a bit unfair, right.

You have a funny understanding of "fair". Is it fair that the taxpayer should pay extra for you because you decided to go travelling in your 20s? Where do your cries about unfairness stop?

Sussex_Dave

My partner turns 40 this year, so will be ineligible to open a lifetime isa. We both have help to buy isa's at the moment. I plan on transferring my funds to a lifetime isa, but I am unsure what happens when we come to buy a house. Can we use her help to buy isa funds alongside my lifetime isa funds and what maximum purchased limit will be applied? I can't find anything on this anywhere. Thanks

colsten

Sussex_Dave, I haven't seen this particular situation considered anywhere. You could ask your MP to get the Treasury to clarify it. Please report back when you get an answer.
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