Life time ISA- comments please!

Luckyinlife

I been looking at this over the last few days

My thoughts are

its a good idea for some like me late 20s self employed and looking for more than 1 way to add to my pension plans

2 things will stop me from doing it

they charge 5% of what you have put in so say i put in 20k thats 1k id lose out of my own money + id lose any interest/bonus i got.
say 10 years down the line i may need that money for something i should be able to get it out if im willing to lose the bonus

second thing
The age why does the government say 60 is a good age to be able to release it yet stop paying the bonus at 50 ? in this case i should be able to have my money out at 50 shouldn't i ?
They should defiantly look at the age thing why 60 the only reason people will do it is for the bonus which stops when your 50 anyway so there will be 10 years where its in limbo maby earning hardly anything compared to what you was getting with the 25% bonus

government should try to make people younger when they can pay they houses off loads/debt more secure why is everything when your 55+ !!!!

i say this mainly because my family when they where or are 65 they have been very hard working and defiantly deserve the money/rest earlier in life if youv worked for it

JimLad

I would definitely consider this if you could draw it when your 50 when the bonus stops. As it is its completely useless to me

edinburgher

The age why does the government say 60 is a good age to be able to release it yet stop paying the bonus at 50 ? in this case i should be able to have my money out at 50 shouldn't i ?

The bonus is a carrot to encourage savers to make further provision for their old age beyond private and state pensions, reducing their dependency on state handouts. If the government were to allow withdrawal at 50, everyone would game the system for maximum returns (as we are already discussing).

So they need to be seen to be generous (but not too generous). To be honest, I would have rather seen a change to flat rate tax relief on pensions than this new offering.

This product is the latest nudge along the line of 'you're working 'til you drop' - it doesn't strike me as being particularly helpful for anyone wanting to finish earlier than 60.

Firegirl

It's great getting everyone thoughts! So I've learnt more about my pension in one day. It's currently at about 30k and it's pretty clear from on line calculators that I'll be broke in retirement of i rely on that alone!

So as a basic rate tax payer if I pay in £68 it means £100 goes to my pension. Which is what Ed said above I think. It might well be worth throwing an AVC in here before I'm made redundant rather than thinking about the life time ISA.

I'm also looking into my fund selections to see if they are sensible.

It is a pitty the life time ISA had the 60 age limit. The govt will benefit when people fall on hard times.

Thanks RT- I'm doing really good at the moment so long may it continue!!

choccielover

edinburgher wrote: »

it doesn't strike me as being particularly helpful for anyone wanting to finish earlier than 60.

Except for those already thinking along the lines of retiring pre 60 and making provisions for such....this could be a potential addition to their finance structure. Not many people still though.....

Did I imagine it or was there talk of changing Isa's so that you can take money out then top back up to the allowance? Did that happen?

Firegirl

Haven't heard of changing ISAs. I guess more info will come out about the life time ISA over the next year.

Firegirl

Thought I'd bring this thread up again!!

The deadline for my husband to apply is coming very soon as the big 40 approaches!

Disappointing there is no cash option available yet. There's only stocks and shares. I think I'll open an account for my husband with the min amount so as we have the option.

Is anyone else taking up the LISA?

bellaboo86

I have considered opening one and treating it like a very long term regular saver. I wouldn't be putting much in it as I need to build up and emergency fund. My main concern is they will change their minds and say we can't withdraw until 70 +

Firegirl

BB86- I think it's a very clever idea. Basically it really appeals to the likes of my husband who thinks pension isn't really money and it just goes out each month. It's hard to resist especially because we have money in an offset mortgage account. We have a flex mortgage with a very long term.

It's a fine line between making your money work the way you want it to and being sensible! Sensible side is save into a pension instead, making our money work for us- we could save the funds from our offset mortgage into a LISA cash account(when they open them) it would at least make more there than in our mortgage!

I've a few years before I'm 40 so I might wait and see what happens over the next few months. I might open one for my husband with a min amount so he had the option later.

I really do know this isn't logically the best option but why am I finding it so hard to resist! It's very customer friendly in terms of seeing the benefits of getting £1000 for every £4000 you invest- looks like a no brainer- until you look deeper........ and then you hear about a death of a 62 year old and think !!!! it- life's to short!