LISA - Any monthly limits?

vikasmaddukuri

For the help-to-buy ISA, there is a monthly 200 limit (apart from the first 1000)
and if you miss you lose out.

Is there any monthly limits or losing out if you don't contribute for the LISA too if you are savings for a first home?
I ask this because the government says it pays bonus monthly from the 18/19 tax year. So, started wondering if there are any monthly limits from now?

bowlhead99

It does pay bonuses monthly now the financial firms have had the chance to set their systems and processes up. But that doesn't mean you have to put money in each month or are only allowed to put a certain amount in each month.

If you put in £0 during a month you'll just get £0 bonus for that month. If you put in £500 the next month, the LISA manager will claim £125 for you in relation to that month. If you put in £2000 during another month, the LISA manager will claim a £500 bonus for you in relation to that month. If you leave it to the last day of the year and put in £4000 having not paid in all year, the LISA manager will claim a £1000 bonus for you in relation to that month.

vikasmaddukuri

Thanks bowhead99, your response answers my question!

Jono987

bowlhead99 wrote: »

It does pay bonuses monthly now the financial firms have had the chance to set their systems and processes up. But that doesn't mean you have to put money in each month or are only allowed to put a certain amount in each month.

If you put in £0 during a month you'll just get £0 bonus for that month. If you put in £500 the next month, the LISA manager will claim £125 for you in relation to that month. If you put in £2000 during another month, the LISA manager will claim a £500 bonus for you in relation to that month. If you leave it to the last day of the year and put in £4000 having not paid in all year, the LISA manager will claim a £1000 bonus for you in relation to that month.

Thank you for this. Been trying to find out exactly how the interest on a LISA works and this is as clear an answer as could be. Cheers!

Alexland

Those comments are about the bonus.

The interest (if applicable) on a LISA works in the normal way - calculated on the daily account balance.

Plus

Alexland wrote: »

Those comments are about the bonus.

The interest (if applicable) on a LISA works in the normal way - calculated on the daily account balance.

So for example:

Year 1:
Deposit £4000 on day 1 of the year (6 April)
Day 30: end of first month period, provider starts claim from HMRC
Day 60: £1000 bonus paid by HMRC
Account left alone until day 365
Year 2:
Account left alone until day 365

Year 1:
Interest on £4000 earned for 12 months (let's say rate is 0.5%) = £20
Interest on £1000 earned for 10 months = £4.17
Year 2:
Interest on £4000+1000+20+4.17=£5024.17 earned for 12 months = £25.12
Total £5049.29

Alexland

Sounds about right but the Skipton interest rate is now 0.75% but yes you should earn interest on the contributions and bonus from the point they are added to the account at a daily rate to achieve the advertised AER.