LISA advice needed

lambert91

I currently have a H2B Isa and I plan on buying a house in May 18, so I need to open a LISA ASAP to get the clock ticking...
Which is the best LISA for me?

I have read other posts on here, from what I have read HL have higher fees to transfer out etc and need a higher minimum deposit than nutmeg? I also saw other posts which said that nutmeg were a 'losing venture' and that nutmeg dont allow transfers out?

I will continue to pay in £200 monthly into H2B as i want to put as little as possible in the S&S isa so I dont lose as much if they make a loss.

If I open a S&S LISA and pay into that and my H2B, and later transfer to a cash LISA, can I also pay into the cash isa in the same tax year?

Thanks in advance for any advice!

masonic

Nutmeg must allow transfers out. It is an HMRC requirement. LISA providers can refuse to accept transfers in. The chances of Nutmeg's finances causing you problems during the short time you would be with them are slim, especially if you intend to transfer to a different LISA well before the end of the tax year.

You can contribute to a HTB ISA and LISA. Once your HTB ISA is transferred into a LISA, then you would be free to pay into a cash ISA within the same tax year - but if you are soon going to use that money as part of your house purchase, there doesn't seem much point in doing so.

lambert91

Sorry I meant transfers in. Will that be an issue transferring my H2B in? Or will I have to transfer from nutmeg to a cash LISA then transfer the H2B money in? Can you pay into 2 different LISA's within the same tax year? Im really confused what the best method of doing this is..

Plus

Nutmeg say they can't currently accept transfers in of HTB to LISAs, but hope to have it in place 'before the end of the 2017/18 tax year'. That would seem a bit tight timewise. Perhaps open a Nutmeg, see where things are in January or so, and then transfer the LISA elsewhere if they haven't implemented it by then (eg to a cash LISA provider)?

masonic

lambert91 wrote: »

Sorry I meant transfers in. Will that be an issue transferring my H2B in? Or will I have to transfer from nutmeg to a cash LISA then transfer the H2B money in? Can you pay into 2 different LISA's within the same tax year? Im really confused what the best method of doing this is..

If your intention is to end up with a LISA that pays interest on cash balances, then don't worry about Nutmeg's inability to accept transfers in. You can transfer out to a provider who will accept your HTB ISA later in the tax year. Some people are waiting for the Skipton BS LISA to become available in a couple of months and will transfer into that.

lambert91

Can you open 2 LISA's in the same year and pay into both in the same tax year? As I am putting 200 monthly into h2b (2400 per year) i dont really want to put 1600 into a nutmeg LISA and would rather put the minimum in nutmeg then put any remaining allowance into a cash LISA when one opens. would this be ok?

Is HL a safer option than nutmeg?

masonic

lambert91 wrote: »

Can you open 2 LISA's in the same year and pay into both in the same tax year? As I am putting 200 monthly into h2b (2400 per year) i dont really want to put 1600 into a nutmeg LISA and would rather put the minimum in nutmeg then put any remaining allowance into a cash LISA when one opens. would this be ok?

You cannot pay into two different LISAs unless you first transfer the original LISA into the new one. So you can put the minimum into the Nutmeg LISA, transfer it, then top it up to the limit.

Is HL a safer option than nutmeg?

Over the short timeframe you will be there, the difference in safety is of marginal concern. HL has very good customer service and will no doubt be very efficient processing applications and transfers, but does charge a £25 transfer fee and £25+VAT account closure fee, which Nutmeg does not.

lambert91

Just looking on the nutmeg wensite, it says you must expect to invest for at least 3 years. Obviously, i will be transferring the balance to a cash LISA when they arrive? Will this be blocked by nutmeg because it hasnt been 3 years?

masonic

lambert91 wrote: »

Just looking on the nutmeg wensite, it says you must expect to invest for at least 3 years. Obviously, i will be transferring the balance to a cash LISA when they arrive? Will this be blocked by nutmeg because it hasnt been 3 years?

No, but their investments are not really suitable for someone to hold for such a short time due to the risk of making a loss.

lambert91

Do you think HL is the better option then? Want to open a LISA asap to get the clock tocking...

masonic

lambert91 wrote: »

Do you think HL is the better option then? Want to open a LISA asap to get the clock tocking...

You need to weigh up the guaranteed loss of using HL (where you do not need to invest the money, but have to pay exit fees) against the risk of losing money that you are forced to invest in Nutmeg.