Anyone using a lifetime ISA for retirement saving?

20SmthngSver

Hi.

I'm using mine for a House Deposit. I've thought about opening another after for pension, but I think my private pension would grow more in the long term over using the LISA for it. So I probably won't now.

How old are you? You can work out how many bonuses you'd get.

Alexland

We have each been contributing £4k per tax year into S&S LISAs since they started a few years ago. We are both basic rate although I avoid being higher rate by making larger pension contributions.

My LISA will be used for (1) clearing the last bit of mortgage that runs slightly beyond my target retirement date, (2) feeding into my younger wife's pension from when I am 60 until she is 60 and (3) helping the children with house deposits in their early 20s.

My wife's LISA will be used to (A) feed into her pension from 60 until 75 for further tax benefit and (B) for ad-hoc capital expenditure on cars and property maintenance in retirement.

We intend to draw retirement income from our pensions (not LISAs) to make good use of the personal allowance.

Alex

Zorillo

I'm using one for retirement, with the aim of significantly boosting my pension pot in my early 60s, or supplementing my pension drawdown if the pot is already large enough by itself.

I'm in no rush to make this year's deposit but I will have approximately £16k in it by the end of this tax year and I hope to have £100k or more by the time I reach 60 in the early 2040s.

It is invested in VLS100 and will remain so unless circumstances change until at least my 50th birthday.

I'm a basic rate tax payer and I already contribute more than the minimum required to maximise my employers contribution.

If I was higher rate then I'd still be doing it just for the extra flexibility it would offer as I approach retirement and the fact I can access 75% of the money if I ever truly need to.

onwards&upwards

Zorillo wrote: »

If I was higher rate then I'd still be doing it just for the extra flexibility it would offer as I approach retirement and the fact I can access 75% of the money if I ever truly need to.

I do think the extra flexibility is a big selling point with this as well as a pension.

gary83

Wildsound wrote: »

At this moment in the time, the cash LISAs are only suitable for those about to buy their first property. Given they've only been around for 2 years and the maximum age of anyone with a LISA will be about 42 years old, anyone using a LISA for retirement should almost certainly be using a S&S LISA as they will be at least 18 years away from being able to access it penalty free.

Unless you're doing this through a financial adviser, you need to be doing a lot of research into where to invest and what to invest in.

I'm going to have to disagree with this, I'm 36, already own a home and am using a S&S LISA for retirement purposes. Im in probably slightly different circumstances to most people in that I don't have the option of an employer matching my deposits in an employee pension (have a government public service pension instead so not complaining about that) I'm choosing to invest in the LISA alongside a S&S ISA, a SiPP and a comfortable "emergency cash pot"

Figured it works for me as the LISA will remain tax free when I come to need it & it won't be a complicated draw down process. I dont forsee having to worry about the 25% penalty, realise you can never say never but I have a job that's probably as secure as they come, 12 months worth of expenses in cash & whilst I'd rather not touch it an ISA that could be accessed in an unforeseen emergency and would keep us going for another two years so I thought personally for me the Pros of the tax free status with the bonus of free money outweighed the Cons.

Whilst I think it's working for me I think for most people unless they're looking for a first house it's probably a pretty badly thought out scheme on the government's behalf though.

TheShape

Wildsound wrote: »

At this moment in the time, the cash LISAs are only suitable for those about to buy their first property. Given they've only been around for 2 years and the maximum age of anyone with a LISA will be about 42 years old, anyone using a LISA for retirement should almost certainly be using a S&S LISA as they will be at least 18 years away from being able to access it penalty free.

Unless you're doing this through a financial adviser, you need to be doing a lot of research into where to invest and what to invest in.

gary83 wrote: »

I'm going to have to disagree with this, I'm 36, already own a home and am using a S&S LISA for retirement purposes. Im in probably slightly different circumstances to most people in that I don't have the option of an employer matching my deposits in an employee pension (have a government public service pension instead so not complaining about that) I'm choosing to invest in the LISA alongside a S&S ISA, a SiPP and a comfortable "emergency cash pot"

Figured it works for me as the LISA will remain tax free when I come to need it & it won't be a complicated draw down process. I dont forsee having to worry about the 25% penalty, realise you can never say never but I have a job that's probably as secure as they come, 12 months worth of expenses in cash & whilst I'd rather not touch it an ISA that could be accessed in an unforeseen emergency and would keep us going for another two years so I thought personally for me the Pros of the tax free status with the bonus of free money outweighed the Cons.

Whilst I think it's working for me I think for most people unless they're looking for a first house it's probably a pretty badly thought out scheme on the government's behalf though.

I don't think you've disagreed with Wildsound at all! In fact, I think you're broadly in agreement.

Imelda

I have a LISA for retirement purposes but in S&S.

One thing I have noted is that if you want to transfer your LISA at any point some providers will only do it if you are under 40 which is a bit annoying!

Novice_investor101

I've got one for retirement purposes. I'm 37.
I max out my employer matched pension contributions, have a stocks & shares ISA for long term investments - aiming for some real growth over the next 20 years & the LISA is stocks & shares too - invested in the Vanguard Global All Cap fund. I pay a monthly sum into these & will continue to until I retire (50 for the LISA).

My plan is to retire at 60 (or earlier if possible). I've a DB pension that will kick in at 65, state pension I'm expecting will have gone up to age 70 by the time I get there, so my plan is from age 60 to use the DC pension to drawdown up to my personal allowance & some basic rate tax.
From age 65, DB & DC to the personal allowance & some basic rate tax & use the ISA's to top up on tax free cash.
I plan to travel etc so will be spending up!

After age 70, all my personal allowance will likely be taken up by SP & DB, & I may be less active, so what's left of the DC may be annuitised & any ISA cash use for enjoying.

That's the vague, long-term plan anyway!

My cash emergency fund/cash savings is in Premium Bonds, so if I win the millions, I'll be retiring asap...

Lungboy

A negative missing from your cons list is that the LISA counts as part of your wealth for any means-tested entitlements. Probably not an issue now but might be in the future.