LISA or H2B ISA

Hopscotch45

My son is 16 and I'd like to get him enrolled on either a LISa or a H2B Isa. From what I've read, it seems a LISA is a better option than an ISA, but he's not eligible for one until he's 18. My question is, should I wait until he's 18, and get the LISA ball rolling then, or should I jump in now and get him a H2B Isa, before they expire on Saturday?

Any thoughts welcome. Thanks.

eskbanker

No harm in opening a HTB ISA now, if only to keep his options open given the imminent scheme withdrawal from product sale - he can open a LISA once he's 18 and decide which one is closer to his requirements then.

He'd need to open it himself though, you can't do it for him.

Flanno

I agree and have a related question. 2 years ago I took out a H2B ISA for my 16 yr old and paid in the max so it has £6k in it. Now 18 I am suggesting she open a S&S LISA and transfer £4k from H2B as unlikely to buy a house for several years. I suggest investing in a tracker as the money will be in there for at least 5 years. Do you see any drawbacks in what I propose? Or any better suggestions?

eskbanker

Flanno wrote: »

I agree and have a related question. 2 years ago I took out a H2B ISA for my 16 yr old and paid in the max so it has £6k in it. Now 18 I am suggesting she open a S&S LISA and transfer £4k from H2B as unlikely to buy a house for several years. I suggest investing in a tracker as the money will be in there for at least 5 years. Do you see any drawbacks in what I propose? Or any better suggestions?

There's a difference between 'unlikely to buy for several years' and 'won't buy for at least five years', but even if five years was a known minimum, it's right at the bottom end of periods over which it's sensible to invest.

Although it's always futile trying to time the market, there have been numerous years of projecting the next downturn in equity markets and it seems inconceivable to me that there won't be significant falls at some point over the next five years, given the length of the current bull run and historical norms, so in her shoes, I'd stick to cash. Whether or not LISA will be a better bet than HTB depends really on how much she's likely to be able to save per year and the value of the ultimate property purchase may also be a factor....