Lifetime ISA

6022tivo

So, you get 25% government bonus at year one, then nothing for the rest of the time it is in the account. So over year after year, that 25% just dilutes?

Alexland

6022tivo wrote: »

So, you get 25% government bonus at year one, then nothing for the rest of the time it is in the account. So over year after year, that 25% does not increase?

Yup you only get a 25% bonus on a contribution once. For the rest of the time you are relying on the Cash ISA compound interest or S&S LISA investment return.

So if you add £4k in year 1 you get £1k, add £4k in year 2 you get another £1k, etc.

6022tivo

The more I think about it, it a bit pants isn't it?
0.1% from Skipton is it??

The HTB was probably better as you get the interest every year, then 25% when you buy the house?
I shouldn't have transferred..

Alexland

6022tivo wrote: »

The more I think about it, it a bit pants isn't it?
0.1% from Skipton is it??

The HTB was probably better as you get the interest every year, then 25% when you buy the house?
I shouldn't have transferred..

Well the main advantages of the LISA are that you can add a further £1600 per year (£4000 versus £2400) for a bigger 25% bonus and also that you can buy a house up to £450k nationwide. However if these are not of use to you then you might have been better staying with a HTB ISA.

ps the interest on Skipton is 0.75%

Alex,

maddoglewis

I'm transferring my HTB ISA into a LISA to take advantage of the extra bonus available for the 17/18 tax year. What I don't understand is why this years interest accrued in my HTB ISA counts towards the £4000 maximum LISA contribution. So, if I have paid in £2400 this year and received £100 interest, I can only pay £1500 into my LISA before the end of this tax year, is that right?

6022tivo

Nope. I believe you can transfer in everything Inc interest from your htb, and also add 4k before April and get the 25% on the lot.

maddoglewis

6022tivo wrote: »

Nope. I believe you can transfer in everything Inc interest from your htb, and also add 4k before April and get the 25% on the lot.

Not if you've already contributed into the HTB ISA this tax year though.

BenZaff

If I open a cash LISA today and deposit £4000, will I get £1000 government contribution at end of March 2019 if I buy a house then? And if I deposit another £4000 in a exactly a years time in March 2019 will I get a further £1k in April 2019 at beginning of new tax year, (I.e 1k for 2017-2018 and 1k for 18-19)? Or will I just get £1k in April 2019 and monthly payments on the new deposited balance of the 19-20 tax year?

eskbanker

BenZaff wrote: »

If I open a cash LISA today and deposit £4000, will I get £1000 government contribution at end of March 2019 if I buy a house then?

No, if you pay in £4,000 before the end of the tax year on 5 April 2018, you'll receive the £1,000 bonus around the end of April 2018.

BenZaff wrote: »

And if I deposit another £4000 in a exactly a years time in March 2019 will I get a further £1k in April 2019 at beginning of new tax year, (I.e 1k for 2017-2018 and 1k for 18-19)? Or will I just get £1k in April 2019 and monthly payments on the new deposited balance of the 19-20 tax year?

Sounds like you've probably misunderstood the timing of contributions and bonus payments - you can pay in up to £4K every tax year (not every 12 month period from opening) and will receive a 25% bonus about 4-8 weeks after you've done so. If you started one with £4K before 5 April 2018, you could pay in another £4K on 6 April 2018 and get a second bonus of £1K around the end of May 2018.

6022tivo

I think I now understand.

So my Halifax HTB Isa I have been paying £200 a month in for the last 11 months sine April 2017 £2200.

I have just transferred it to Skipton (total of about £5k) so does this mean I can pay only a further £1800 in before the end of this month?