Multiple LISAs and home deposit

alibraton

Hello everyone,
I've been reading that as with normal ISAs, we can open multiple LISA, one per year.
So let's assume the following scenario:
year 1 - LISA1: savings £4000 + bonus £1000
year 2 - LISA1: savings £9000 (year 1 savings and bonus + additional £4000) + bonus £1000
LISA2: savings £4000 + bonus £1000
year 3 - I wan to buy a house as first-time buyer. Can I use the money from both the LISAs towards the home deposit? Would I still have the bonus for both the LISAs or the bonus will be lost for one of them?

Thanks in advance for your replies, I tried to google this type of scenario but I couldn't find anything.

masonic

Any reason why you would not consolidate all of the funds into one LISA prior to making the penalty free withdrawal?

alibraton

That's the point of my question. I'm trying to understand what are the possible options that I have. What you said is something that I haven't considered at all. So is it possible to merge two LISAs together at some point in time?

badger09

alibraton wrote: »

Hello everyone,
I've been reading that as with normal ISAs, we can open multiple LISA, one per year.
So let's assume the following scenario:
year 1 - LISA1: savings £4000 + bonus £1000
year 2 - LISA1: savings £9000 (year 1 savings and bonus + additional £4000) + bonus £1000
LISA2: savings £4000 + bonus £1000
year 3 - I wan to buy a house as first-time buyer. Can I use the money from both the LISAs towards the home deposit? Would I still have the bonus for both the LISAs or the bonus will be lost for one of them?

Thanks in advance for your replies, I tried to google this type of scenario but I couldn't find anything.

I may be misreading your question, but in year 2 above, it looks as though you are paying £4000 into LISA 1, and another £4000 into LISA 2.

That is not possible. You can pay a maximum of £4000 per tax year into your LISA

So, in year 2 you could either pay £4000 into LISA 1, or open another LISA and pay £4000 into that. But you can't do both.

alibraton

badger09 wrote: »

I may be misreading your question, but in year 2 above, it looks as though you are paying £4000 into LISA 1, and another £4000 into LISA 2.

That is not possible. You can pay a maximum of £4000 per tax year into your LISA

So, in year 2 you could either pay £4000 into LISA 1, or open another LISA and pay £4000 into that. But you can't do both.

Hi badger09,
you didn't misread. That is actually another point that I want to understand better.
So, based on what you said, I can't pay more than £4000 per year in total and not per LISA per year. Am I right?

badger09

alibraton wrote: »

Hi badger09,
you didn't misread. That is actually another point that I want to understand better.
So, based on what you said, I can't pay more than £4000 per year in total and not per LISA per year. Am I right?

Correct.

Maximum you can pay in, in any tax year is £4k.

The other rule is that all current year LISA subscriptions (new money paid in, same rule applies to other types of ISA) must be kept together. So, if you start paying into LISA 1 and then in same tax year see a better rate/more attractive one elsewhere, you must fist ask new LISA provider to xfer LISA1 for you and once transfer complete, you can pay more into that one, subject to £4k max of course.

You can split previous years' subscriptions however you want to.

alibraton

badger09 wrote: »

Correct.

Maximum you can pay in, in any tax year is £4k.

The other rule is that all current year LISA subscriptions (new money paid in, same rule applies to other types of ISA) must be kept together. So, if you start paying into LISA 1 and then in same tax year see a better rate/more attractive one elsewhere, you must fist ask new LISA provider to xfer LISA1 for you and once transfer complete, you can pay more into that one, subject to £4k max of course.

You can split previous years' subscriptions however you want to.

This has clarified all my doubts! Thank you.

masonic

alibraton wrote: »

That's the point of my question. I'm trying to understand what are the possible options that I have. What you said is something that I haven't considered at all. So is it possible to merge two LISAs together at some point in time?

Yes, you can transfer one into the other, not all LISAs accept transfers from other providers, but all cash LISAs do at this time (I believe). I can't think of a good reason for holding two LISAs if you are planning to use all the money towards a house purchase in the short term - unless a LISA appears with a favourable rate for 'new money' only, which hasn't happened yet.

Alexland

Yes if saving in Cash LISAs there is currently no reason to have multiple accounts (as you can only contribute new money into one LISA per tax year) so you just keep moving the LISA between providers to get the best rates. The current best buy Moneybox accepts transfers-in of old LISAs.

https://www.moneysavingexpert.com/savings/lifetime-isas/

https://www.moneyboxapp.com/cash-lifetime-isa/

alibraton

masonic wrote: »

Yes, you can transfer one into the other, not all LISAs accept transfers from other providers, but all cash LISAs do at this time (I believe). I can't think of a good reason for holding two LISAs if you are planning to use all the money towards a house purchase in the short term - unless a LISA appears with a favourable rate for 'new money' only, which hasn't happened yet.

Yes you're right. The thing is that I wasn't aware that you can pay only in 1 LISA per year. So my point was if I pay in 2 LISAs, I get the bonus twice, but then can use both for an home deposit? But since with the previous replies I got that you can't pay in more than 1 LISA per year, my original thought is not valid anymore.