MSE News: Skipton to launch first cash Lifetime ISA

Skipton Building Society will launch its Lifetime Cash ISA on Thursday paying 0.50% for savers aged 18-39...
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'Skipton to launch first cash Lifetime ISA'
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  • RheumatoidRheumatoid Forumite
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    My daughter is in no hurry to buy so at 0.5% it looks like its better to wait to see if there are any better offerings and/or just keep the 4k in a higher paying account until just before the end of this tax year and then deposit it.
    16 Panel (250W JASolar) 4kWp, facing 170 degrees, 40 degree slope, Solis Inverter, Geo Solo II Monitor. Installed 29/9/2015 - £4700 (Norfolk Solar Together Scheme). 9.6kWh Pylontech battery with Solis Inverter (12/4/2022).
    Year target (PVGIS-CMSAF) = 3880kWh - Installer estimate 3452 kWh: Averaging 4300kWh :j
  • eskbankereskbanker Forumite
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    Given the existence of the separate dedicated ISAs & Tax-Free Savings board, wouldn't it make more sense to post this thread there instead (or as well)?
  • badger09badger09 Forumite
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    eskbanker wrote: »
    Given the existence of the separate dedicated ISAs & Tax-Free Savings board, wouldn't it make more sense to post this thread there instead (or as well)?

    Preferably instead;)
  • jimjamesjimjames Forumite
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    It's a shame the article mentions risk of S&S LISAs a couple of times yet makes no mention that using cash for retirement savings over a 20+ year period is not a good idea and potentially more risky
    Remember the saying: if it looks too good to be true it almost certainly is.
  • ricky_vricky_v Forumite
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    It's a shame the article mentions risk of S&S LISAs a couple of times yet makes no mention that using cash for retirement savings over a 20+ year period is not a good idea and potentially more risky

    LISA is basically rubbish anyway as the vast majority of PAYE employees get a bigger "bonus" through salary sacrefice. To pay into a cash LISA at an interest rate a quarter of the current inflation rate is sheer madness.
  • edited 6 June 2017 at 9:36PM
    bowlhead99bowlhead99 Forumite
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    edited 6 June 2017 at 9:36PM
    ricky_v wrote: »
    LISA is basically rubbish anyway as the vast majority of PAYE employees get a bigger "bonus" through salary sacrefice. To pay into a cash LISA at an interest rate a quarter of the current inflation rate is sheer madness.
    The "vast majority" of PAYE employees do not have the opportunity of salary sacrifice because the number of employees offered it is not a vast majority. So the idea that the vast majority of people get a bigger bonus via that route is tosh.

    Even if it were true that the "vast" majority of people could get salary sacrifice NI savings, which they can't, a large proportion of employees will already end up making sufficient contributions to workplace pensions offer the course of their life to be on a non-zero marginal tax rate in retirement. As such, incremental workplace pension would be fully taxable at the marginal rate (other than the 25% lump sum tax free). This would convert the basic rate tax relief and NI relief of a sal sac pension to be not a penny better than getting a flat 25% bonus in a Lisa with nil tax to pay on withdrawals.

    Also the Lisa does not need planning on timing of withdrawals; whereas taking a big lump from your pension to buy a shiny car or pay off the house needs managing across multiple tax years to avoid going into high rate tax band.

    So, I suspect you haven't thought it through.

    You are right of course with your second sentence, that a cash account is unsuitable for a 20-30 year retirement vehicle. But that point had already been made by the poster seven hours before you, directly above you in the thread. :) A cash LISA is suitable for saving up towards getting a property and what you don't end up using for that purpose you can transfer into a S&S LISA and use for your retirement goal, with more flexibility than a pension.
  • MalthusianMalthusian Forumite
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    bowlhead99 wrote:
    A cash LISA is suitable for saving up towards getting a property

    ...as long as a) you know exactly what level of deposit you are saving towards b) you are aware that you will be running to stand still, i.e. by the time you have saved up your target deposit, houses will be more expensive so you will need to save a bit more again.

    I suspect that this applies to fewer people than the conventional wisdom of "if you're saving for less than 5 years you have to use cash" allows for.
  • They've sent an email out to all those who signed up to the newsletter for the LISA isa..turns out it's a generic link and you can signup a day early..yay! http://www.skipton.co.uk/savings/isas/cash-lifetime-isa
  • dunstonhdunstonh Forumite
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    jimjames wrote: »
    It's a shame the article mentions risk of S&S LISAs a couple of times yet makes no mention that using cash for retirement savings over a 20+ year period is not a good idea and potentially more risky

    And we have already had someone post in the Pensions section of the board asking if this is a good option for their retirement planning. It is a bloody awful option.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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