Isa's and Lisa's

howlingwhale

Having just seen Martin on TV this morning I thought I would look at which banks I could open an Isa and a Lisa by putting in just a pound in each as he suggested. However I'm confused. Most banks that I've already called (Nationwide, First Direct, Barclays and Santander) say they don't offer both and Nationwide also told me that you can't open them in different banks. So does anyone know which banks offer both? Also Martin says just put a £1 in to get them started but Nottingham Building Society says the minimum pay in is £10. Any advise would be welcome especially as the deadline approaches. Thanks

SonOf

Also Martin says just put a £1 in to get them started but Nottingham Building Society says the minimum pay in is £10.

Just because Martin says it is £1 doesn't mean it actually is. It is more metaphoric than specific. What he is effectively saying is get the minimum in there as early as you can as is it the date the account is opened with a LISA that is important.

You shouldn't take what Martin says as gospel or with absolute accuracy as the short stints he has on TV do not give sufficient time for him to add caveats.

You can only pay into one LISA provider per tax year. You can't pay a £1 in each.

bowlhead99

Nationwide don't have a LISA product. Any comment to you from them about not being able to open two products 'with different banks' probably related to the Help to Buy Cash ISA and a normal Cash ISA - which are both types of 'Cash ISA' and couldn't be split across multiple providers in the same tax year. All your 'Cash ISA' money from the same tax year has to go into the same bank /building society.

However, a bit confusingly, a LISA is not a special type of 'Cash ISA', it's an entirely separate category of ISA on its own. Again, all LISA money for a tax year must go into one provider. So you can't go around putting £1 into lots of them.

There's a decent list of LISA providers at https://www.which.co.uk/money/savings-and-isas/isas/lifetime-isas-ac6mf6s7r9d5#headline_9

If you were going to use a LISA to eventually buy a first home, it would generally make sense to use the cash version of the LISA product, offered by Skipton, Nottingham or Newcastle Building Societies. However, if you were using it to put away money as an investment for retirement age 60+, it would make sense to use an investment 'stocks and shares' LISA from an investment firm such as AJ Bell Youinvest, Hargreaves Lansdown etc.

Martin's point was just that you should set one up sooner rather than later even if you don't have much to put away right now - because you can't open one once you've turned 40, and if you want to use a LISA bonus to buy a property you need to have had the account open at least 12 months. So, no time like the present. If the account provider says the minimum amount to open is £10 instead of 10p, fair enough -they can set their own rules. Martin would intend for you to use some minimum sensible amount to get started.

xylophone

https://www.gov.uk/individual-savings-accounts

There are 4 types of ISA:

cash ISAs
stocks and shares ISAs
innovative finance ISAs
Lifetime ISAs
You can put money into one of each kind of ISA each tax year.


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

You can only have one Lifetime ISA in each tax year, and you can pay in up to your Lifetime ISA allowance (£4,000 in the 2019/2020 tax year) each tax year up to and including the day before your 50th birthday. During the same tax year you can also have one Cash ISA, one Stocks & Shares ISA and an Innovative Finance (peer-to-peer) ISA. The combined total of your ISA savings must not exceed the annual ISA allowance (£20,000 in 2019/2020.)

For example, if you save the maximum of £4,000 into a Lifetime ISA, you would still have £16,000 left of your ISA allowance.[/I]

eskbanker

howlingwhale wrote: »

Any advise would be welcome especially as the deadline approaches.

I haven't seen the TV piece you refer to but imagine that he'll be commenting on the fact that it isn't possible to open a Help To Buy ISA after this month, so that's something that needs to be done soon. As bowlhead99 points out, a Lifetime ISA needs to be open for a year before it can be used without penalty so that'll probably be behind the sense of urgency there.

howlingwhale wrote: »

Most banks that I've already called (Nationwide, First Direct, Barclays and Santander) say they don't offer both

Phoning round banks seems a remarkably inefficient way of researching this when you can easily do so from the comfort of the same computer/tablet/phone on which you were posting!

MSE helpfully provides articles explaining the products and where to find the best ones:
https://www.moneysavingexpert.com/savings/lifetime-isas/
https://www.moneysavingexpert.com/savings/help-to-buy-ISA/