When to put £ into my LISA?

HPLCEngineer

Hi,

I've just switched my H2B ISA to a LISA with Skipton. Their account has a low 0.75% interest rate.

Is there any reason I can't put the £4000 (maximum) into this LISA a couple of weeks before the tax year ends instead of putting it in month by month?

I'd like to hold this £4000 in a higher interest paying account.

Thanks.

xylophone

https://www.skipton.co.uk/savings/isas/cash-lifetime-isa

You can deposit from £1 up to £4,000 each tax year before your 50th birthday.


It doesn't say that it must be at any particular time in the tax year....

realaledrinker

Any 2017/8 contributions to your HTB ISA plus accrued interest which come over from the HTB provider need to be deducted from the £4k. Lets say you have done the £200/m for April - Feb, that's 11 x 200, say £2250 with interest. You can put in £1,750 to the LISA (£4,000-£2,250) on or before 5th April and £4k on the 6th April.


If you try and put in more than the £1,750 in this example, the whole lot will get sent straight back to your current account.

radoslaff

realaledrinker wrote: »

Any 2017/8 contributions to your HTB ISA plus accrued interest which come over from the HTB provider need to be deducted from the £4k. Lets say you have done the £200/m for April - Feb, that's 11 x 200, say £2250 with interest. You can put in £1,750 to the LISA (£4,000-£2,250) on or before 5th April and £4k on the 6th April.


If you try and put in more than the £1,750 in this example, the whole lot will get sent straight back to your current account.

I don't think so. For this year the HTB contribution does not need to be deducted from the £4k. You can transfer £6k from your HTB ISA to your Lifetime ISA and you still can add the £4k a week before the end of the financial year. This provided that the money goes through on time of course. With the Lifetime ISA you don't need to pay monthly, you can do it in the very last moment if you can bear the risk for a delay.

eskbanker

realaledrinker wrote: »

Any 2017/8 contributions to your HTB ISA plus accrued interest which come over from the HTB provider need to be deducted from the £4k. Lets say you have done the £200/m for April - Feb, that's 11 x 200, say £2250 with interest. You can put in £1,750 to the LISA (£4,000-£2,250) on or before 5th April and £4k on the 6th April.


If you try and put in more than the £1,750 in this example, the whole lot will get sent straight back to your current account.

I suspect that OP's reference to funding the LISA "a couple of weeks before the tax year ends" is actually referring to the end of the 2018/19 year rather than the current year, hence the suggestion of holding the money elsewhere first to earn more interest....

eskbanker

radoslaff wrote: »

I don't think so. For this year the HTB contribution does not need to be deducted from the £4k. You can transfer £6k from your HTB ISA to your Lifetime ISA and you still can add the £4k a week before the end of the financial year.

No, realaledrinker is correct, 2017/18 HTB contributions (and interest) do need to be deducted from the £4K LISA allowance when transferring before the end of this tax year - it's only pre-17/18 HTB contributions that are excluded from this.

donerkebab

Can someone confirm as I assume its too late now due to Skipton 1/3 ISA deadline but for next year if I open then transfer full 4k before 1/3 deadline then I get full 1k bonus regardless of when the 4k is added? (ie nearer the end to maximise interest elsewhere?)

eskbanker

donerkebab wrote: »

Can someone confirm as I assume its too late now due to Skipton 1/3 ISA deadline but for next year if I open then transfer full 4k before 1/3 deadline then I get full 1k bonus regardless of when the 4k is added? (ie nearer the end to maximise interest elsewhere?)

I'm not aware of Skipton's 1 March deadline being expected to apply again next year but yes, any valid contribution to a LISA at any time of year will receive a 25% bonus 4-8 weeks later.