Launch lifetime ISA Suppliers

EvilSmoothie

Hello,

I recently opened a help to buy ISA with the maximum £1200 opening allowance. When the lifetime ISA I'd launched I hope to open one as soon as possible and transfer my help to buy ISA into it and carry on saving. I want to open the lifetime ISA as close to April as I can as I know you need to wait a year before you can draw the bonus from the lifetime isa.

It seems there is only two months until these can be officially launched and so far I cant find any suppliers, only nationwide saying that they will not offer it.

I've seen a stocks and shares lifetime offered but I understand this kinds of ISA is only suitable for long term savers and it has risks involved. I won't be saving for years and don't want to gamble, I just want to make the most out of my money I can.

Is anybody aware of any bank who has indicated that they will have a early lifetime ISA launch? Can't stick with a help to buy ISA as I will struggle with the 250k cap in the area we live so need to consider my options. April 2018 is a realistic time for us to want to buy and don't want to get stuck waiting until the end of 2018

masonic

I expect that a LISA that pays interest will be available around the same time as these "S&S only" LISAs that you have seen. If not, it is unlikely you would be forced to pick investments within a S&S focused LISA, so you could in theory open one, throw in the money and leave it there until you are ready to buy, albeit getting the bonus but no interest.

bowlhead99

If your initial criteria is just "I want to open a LISA as soon as possible so I can start the clock ticking on having had it open a year and being allowed to withdraw the bonus and buy a property", then just open one with the first Cash ISA provider who has launched and transfer to your longer-term provider of choice once more are available and you can do some sensible comparisons.

The ISA regulations have not yet been updated to allow LISA's to exist yet, though the industry consultation is now closed. The FCA's policies in respect of LISA's have not yet been finalised and published yet either, though again the consultation period has ended.

The government is aiming for LISAs to be legal by 6 April and have never said it will be any earlier than that. The Cash ISA managers who have not been supplied with the final regulations can't finalise their terms and conditions and internal training and external marketing. We don't know what the market interest rates will be in April for savings products generally nor what the market rate for LISA's will settle at.

There is no need now to go setting up a list of providers as of today. If I give you three names there might be two more names next month with a better product than all three of them and ten more in April, each better than the last.

Long story short, come back in two months.

EvilSmoothie

Thanks for the replies. It's not a case of I am looking to compare LISA's, more my point if anybody knows of ANY as so far I have seen none and if there are none at launch I may need to make other plans. The article I read said there are currently no big names down for launch.

If i were to open a stocks and shares one as suggested, in theory could I transfer this into a cash ISA when they become available?

masonic

EvilSmoothie wrote: »

Thanks for the replies. It's not a case of I am looking to compare LISA's, more my point if anybody knows of ANY as so far I have seen none and if there are none at launch I may need to make other plans. The article I read said there are currently no big names down for launch.

I have no reason to doubt what you have read. They probably based that on some research, whoever "they" are.

If i were to open a stocks and shares one as suggested, in theory could I transfer this into a cash ISA when they become available?

In theory, yes, but there could be an account closure fee. Working on the assumption that your money has the potential to earn more interest outside the LISA, you might wish to open with the minimum and then transfer in and top up at the end of the tax year, just a short while before you want to use the funds.

anselld

EvilSmoothie wrote: »

Thanks for the replies. It's not a case of I am looking to compare LISA's, more my point if anybody knows of ANY as so far I have seen none and if there are none at launch I may need to make other plans. The article I read said there are currently no big names down for launch.

If i were to open a stocks and shares one as suggested, in theory could I transfer this into a cash ISA when they become available?

They don't start till April so no point launching now.
Come April there will probably be more than you can shake a stick at.

If they are the same as current ISAs you can transfer Cash to S&S but not vice versa.

masonic

anselld wrote: »

If they are the same as current ISAs you can transfer Cash to S&S but not vice versa.

You can transfer S&S ISAs to cash ISAs and have been able to do so for a long time.

EvilSmoothie

masonic wrote: »

I have no reason to doubt what you have read. They probably based that on some research, whoever "they" are..

I was referring to the information posted right here by money saving expert. They have now put up a list but still none confirmed for launch which is a pain but hopefully may change soon.

One last question if thats okay. With the help to buy ISA I still have i intend to carry on paying into it and transfer it to the LISA if i can in March 2018 right before I could use it so i can draw from the help to buy if i buy before a year is up.

I will refer to this article blog.moneysavingexpert.com/2016/07/25/24984/amp

I understand that anything i put in post LISA counts towards the 4K LISA limit so need to bare that in mind. The blog says i should put £1600 into the LISA as that's 4k - 12x £200 (£2400) (april-march) contriubutions post LISA. However it also says that it's contributions post 6th April 2017.

Therefore if i put to £200 on the 1st April 2017 does that not count towards the LISA limit meaning i can effectively put £1800 into the LISA as i will only have put £2200 into the help to buy post LISA 6th April

Hopefully that makes sense.

bowlhead99

EvilSmoothie wrote: »

I understand that anything i put in post LISA counts towards the 4K LISA limit so need to bare that in mind. The blog says i should put £1600 into the LISA as that's 4k - 12x £200 (£2400) (april-march) contriubutions post LISA. However it also says that it's contributions post 6th April 2017.

Therefore if i put to £200 on the 1st April 2017 does that not count towards the LISA limit meaning i can effectively put £1800 into the LISA as i will only have put £2200 into the help to buy post LISA 6th April.

The HTB ISA is limited per calendar month.

If you made a contribution to one between 1st to 5th April 2017, it would fall into your 2016/17 allowance and so when you later transferred the balance into a LISA, it would all be "previous tax year money" and not impact your 2017/18 LISA contribution limit of £4k.

However, if you had made a £200 contribution to a HTB ISA between 1st to 5th April 2017 you could not also make a £200 contribution between 6th to 30th April 2017, as I understand it, because that would be well over your calendar monthly limit. If you'd contributed in early April you could only add next in May onwards.

However whether you start doing your 2017/18 contributions to the HTB product in April or May or June, if there are *any* 2017/18 contributions in it and you later transfer it into the LISA, those 2017/8 contributions that went via the HTB will come out of the overall £4000 limit for 2017/18 LISA contributions, reducing the £4000 limit to some lower remaining amount.

Your 2017/8 LISA contributions that you can get a bonus on, can be £4000 direct or "£4000 - £x" direct where £x is the 2017/18 contributions you made into a HTB ISA which was subsequently transferred.

The highest practical amount for £x is £2400, being £200pm April '17 to March '18, because you'll not be able to reliably count on making a HTB subscription on Monday 2 April 2018 and being able to get the whole ISA transferred into a LISA by Thursday 5 April 2018 and if you missed that window to transfer you're scuppered.

So if you follow what MSE suggests, you could do £2400 HTB next year starting late April and doing the last £200 in early March 2018 and leaving a few weeks for the transfer to safely get through before 5 April 2018. And do £1600 direct to LISA.

However it might be smarter to do a contribution in early April (ie as old year money) and then do £2200 starting May and ending March, with £1800 direct to the LISA. You still get £4000 into the LISA for 2017/18 but you also make good use of that stubby 5-day period at the start of April 2017 to call another £200 "old 2016/17 contributions" and still do a whole £4000 in 2017/18.

masonic

EvilSmoothie wrote: »

I was referring to the information posted right here by money saving expert. They have now put up a list but still none confirmed for launch which is a pain but hopefully may change soon.

I think Bowlhead has answered your question, but just for reference this forum is separate to the MSE main site.

Ed-1

bowlhead99 wrote: »

The highest practical amount for £x is £2400, being £200pm April '17 to March '18, because you'll not be able to reliably count on making a HTB subscription on Monday 2 April 2018 and being able to get the whole ISA transferred into a LISA by Thursday 5 April 2018 and if you missed that window to transfer you're scuppered.

That's interesting. Does a transfer initiated before the end of the next year not count as OK if it is not completed until after the tax year has ended?

Very relevant for transferring a pre-2017/18 H2B ISA balance into a LISA in tax year 17/18 only.