Transferring LISA

Alexland

MillieVanillie wrote: »

I was asking as I’ve read on a different forum that a member went into a skipton branch and was told it would restart the clock.

I think I’ll try to pop into one myself and double check. If anyone has already transferred their LISA to Skipton I would love to hear how it went.

I wouldn't trust branch staff on a product this complicated. The bonus is from HMRC and they don't care who your provider is and are generally in favour of you having choice. I would keep a printout showing your original LISA opening date just incase.

owsemyr

Hi everyone. I have just spoken to someone from Skipton who says that the opening date from the Nutmeg account does not carry over. Does anyone know if what you said above is written down anywhere? Because I thought that what you said was true, so it's quite disappointing for Skipton to say otherwise!

Alexland

owsemyr wrote: »

Hi everyone. I have just spoken to someone from Skipton who says that the opening date from the Nutmeg account does not carry over. Does anyone know if what you said above is written down anywhere? Because I thought that what you said was true, so it's quite disappointing for Skipton to say otherwise!

I just answered this for you in the other message you posted.

https://forums.moneysavingexpert.com/discussion/5798479

Alex.

Sillychuckie

Hargreaves Lansdown sent out a mass-message to all LISA holders recently, which included the following line:

"Going forward, it will no longer be possible to transfer a Lifetime ISA to the HL Lifetime ISA."

I queried this with a private message, to clarify what it meant, and they replied with:

"I can confirm that the previous correspondence you received from us was correct, in that we will no longer be accepting Lifetime ISA to Lifetime ISA transfers from the new tax year onwards."

HL are essentially stating now, that they will NOT accept any transfers in from external providers, of Lifetime ISA's.
As you can't close your LISA until you are 60, if other ISA providers follow suit, you'll essentially be stuck with them forever wherever it is you first opened them.

This LISA product is already quite an iffy one (misselling scandal of the future perhaps), so any anti-competition or anti-transfer stance such as this, puts me further on edge.

Has anyone opened a LISA with any other providers and seen anything like this? Can anyone fathom why HL would take this stance (essentially saying they don't want more money to manage!)... It strikes me as rather odd. This is after all, how they make money! (charging a % of a holding).

I get nervous when I don't understand something. Perhaps someone can explain.

SC.

Alexland

Very strange - glad we started our Nutmeg to HL transfers using the PDF printed paper form this tax year. Mine is nearly complete and my wife's is still in early days. A S&S LISA for long term investment should be reasonably profitable as they have all the costs of running their platform anyway. I can see that short term customers transfering in HTBs and then withdrawing for property purchases might be less attractive.

ValiantSon

That is bizarre. I can't quite see how it is to their advantage to refuse transfers in.

This certainly further narrows an already not very wide market.

It doesn't inspire confidence in the future of LISAs.

bowlhead99

Unlike JISAs or HTB ISAs you don't need to keep all your LISA money in one place. You can open up a new one every year and use as many separate LISA 'pots' as you like for house purchase or retirement funds.

So if HL don't want you to transfer in, then stay where you are or transfer to one of the other six S&S LISA providers or the other providers that have yet to offer a LISA product but will do so in the future. It's not like HL are known for being the cheapest place in town once your balance gets larger; after a couple of years worth of max contributions and bonuses in it, your platform fees will be around £50 a year and there is scope in that for rivals to undercut if it gives them a long term revenue stream.

Alexland

It would be messy to have LISAs for different tax years with multiple providers given their relatively low value compared to ISA and pension contribution limits. We are already having to split those accounts across multiple providers to keep within reasonable exposure against the FSCS limit. I had settled on HL being our LISA provider and building up a couple of low six figure pots (starting with funds then moving to an ETF or IT to cap fees) but if they are starting to close for new business it's a concern.

Alex

Herbalus

I wonder what the reasoning behind this is.

Not a huge concern now as you can still open a new one with HL and we are not so far into LISAs that the choice of providers matters hugely (low balances). I am more concerned with the ability to transfer out if the LISA wagon gets dropped by govt. and we are left with small pots in limbo until aged 60, not able to transfer to a better provider whilst suddenly fees start increasing. Akin to Child trust funds that get forgotten when no longer politically expedient and the rates drop.

I am with HL for the LISA as they offer no trading fees for monthly sums (funds). The idea is to transfer out when I have enough to buy the same funds in a lump sum on a cheaper % provider.

Sillychuckie

Further clarity from HL after another quick support message to-and-fro....

They wrote:

Hargreaves_Lansdown wrote:

"Hargreaves Lansdown has taken the business decision not to accommodate transfers from other providers because of the complexity of the transfer process. The nature of the product, including the government bonus and the registering of the ISA, means that many providers are not equipped with the system or capacity to transfer Lifetime ISA's in a reasonable timeframe, or to ensure that all bonuses are correctly received. As of yet, a bonus is yet to be paid, and so we have been able to accommodate the transfer of Lifetime ISA's until next tax year."

Sounds odd to me really.
A SIPP also comes with a 'bonus topup' and has far more complexities involved with it (e.g. protected benefits/rights etc)... and they are happy to transfer these in. Perhaps its HMRC/Govt who are yet to set up the infrastructure to support tracking these & the bonus payments made.

I suspect that as LISA pots get larger in future years, they might change their mind. At the moment though, its obviously not worth their effort for what is certainly no more than 4k.

Still - if HL take this stance (and they have mega resources), others might do the same. Another potential tickbox in the 'cons' of LISAs...

SC.