Has anyone taken out a LISA - which is best one

FIRSTTIMER

Hi,


I am interested in pursing a LISA as a long term saving option - current age 30's and have got a mortgage/house.


I like the idea of better growth with £4000 a year with a stocks and shares isa but don't want to pay huge costs and ideally nothing too risky where my capital disappears!


Has anyone taken one out - I have looked at a few that are recommended on here - if the provider website says potential growth of 4-5% per annum - will I get that added per annum? As I am thinking in an extreme emergency if I withdraw, the interest and growth I have potentially received will offset the capital I have already put in meaning the twenty five percent penalty wouldn't hit me too hard?


Advice please...

eskbanker

FIRSTTIMER wrote: »

I like the idea of better growth with £4000 a year with a stocks and shares isa but don't want to pay huge costs and ideally nothing too risky where my capital disappears!

Costs are shown for each provider in the summary at https://www.moneysavingexpert.com/savings/lifetime-ISAs#bestbuysstocks. You'll have a wide range of investment options within each of these, some will be lower risk than others, but even these do bring a risk of capital loss, albeit complete loss is extremely unlikely.

FIRSTTIMER wrote: »

if the provider website says potential growth of 4-5% per annum - will I get that added per annum?

It's potential growth but could be losses, albeit the growth years should outnumber the loss years over the long term. It's not added separately as such, the growth comes from the value of each of the units/shares that you buy.

FIRSTTIMER wrote: »

As I am thinking in an extreme emergency if I withdraw, the interest and growth I have potentially received will offset the capital I have already put in meaning the twenty five percent penalty wouldn't hit me too hard?

There is no interest in S&S (L)ISAs - depending on what you invest in, you may receive separately-identified dividends (in others these will simply be rolled up into a higher unit value). It shouldn't take too much growth to offset the withdrawal penalty though (it's effectively 6.25% once you strip out the bonus you've already received), but generally it's a bad idea to commit money to investing at all if you think you might need it at short notice, so you should ensure that you build up an emergency 'rainy day' fund in readily-accessible cash form before starting on investing....