Advice re opening a LISA on HL platform :)

funguy

Dear All,

Thank you for taking the time to read this post. I suspect (like a lot of people) I have read lots of posts about LISAs. I have made up my mind to open one for retirement purposes. I think theres no need to go into whether that is appropriate for me over pensions etc as theres other threads for that. What i was looking to form was a guide to opening a S+S LISA once you have made up your mind to open one...

I see there are 2 or 3 platforms available to open them. I like the look of HL as it allows you to choose from a variety of funds etc. Their fees seem a bit higher compared to Nutmeg and the Share Centre etc.

So is anyone able to run through the practical steps for me?

My guess so far is :
1) I open a S+S LISA on the HL website and they ask me to choose which fund i want to invest my £4000 in.
2) The value of the fund goes up/down and in a year the government adds an extra £1000 into the pot - do HL just use the £1000 to buy more units/shares in the fund automatically?
3) If i choose to accumulate dividends within the fund, i assume HL will again just buy more units/shares in the fund?
4) Next year i can choose to add a further £4000 into the account and the process goes round again?

Is it as simple as that or will there be additional fees/charges etc each time more dividends are accumulated or the £1000 binus comes in etc?

Your advice is appreciated...
Thanks

eskbanker

funguy wrote: »

1) I open a S+S LISA on the HL website and they ask me to choose which fund i want to invest my £4000 in.

You aren't restricted to just one fund, you can allocate your money to however many you wish to buy.

funguy wrote: »

2) The value of the fund goes up/down and in a year the government adds an extra £1000 into the pot - do HL just use the £1000 to buy more units/shares in the fund automatically?

No, the bonus will go into your cash pot within the HL platform until you decide which fund(s) you wish to buy.

funguy wrote: »

3) If i choose to accumulate dividends within the fund, i assume HL will again just buy more units/shares in the fund?

If you wish to accumulate dividends within a fund, then choose Acc units, where dividends are automatically reinvested and this will be reflected in higher unit value (not additional units). If you wish to choose to do something else with dividends, buy Inc units instead, which will pay them back out to your cash pot (but still within the ISA wrapper).

ColdIron

1. Or you could leave it as cash and make your choice later. Or add £1,000 now and £3,000 later. Up to you
2. It will be cash and you can leave it, buy more units in a different fund etc. Up to you
3. If you choose Accumulation (Acc) units the fund manager will keep them in the fund. If you choose Income(Inc) units he will pay them out and you can instruct HL to reinvest them for you. Better to go for Acc units if you just want to leave the funds as they are
4. Yep

If you go for funds each fund will charge a fee which the fund manager will retain from within the fund. HL will charge you an additional 0.45% pa charged monthly. Leave some cash in your account to pay these

The charging structure is different if you don't buy funds

AnotherJoe

HLs fees would be lower than Nutmegs. Share centre, don't know.