lifetime ISA

dd95

hi masonic

current plan

early twenties, just under 20k salary living with parents in the NE. Currently putting 200pm in a HTB ISA and remainder into a stocks and shares ISA and premium bonds. Currently contribute 5% to pension matched by employer. No salary sacrifice.

future
looking to purchase first house on qualification (next few months)
salary is hard to predict but should be looking at approx 55-60k in ten years and 150k-300k in 20. I would guesstimate i likely retirement age around 60?

your opinions would be greatly appreciated. i just thought contributed a nominal amount monthly to a LISA will add up over the years (will increase these as salary increases)

masonic

Based on the above a S&S LISA could certainly be useful in your retirement plan, to use alongside your pension. In the early years, it would make sense to use the LISA for retirement savings above your employer matched pension contributions. As your income grows, you may become a higher rate taxpayer and it would make sense to prioritise the pension for higher rate tax relief.

When you retire, you'd be able to take money from your LISA tax free in addition to your 25% pension lump sum and personal allowance so as to avoid taking money from your pension net of basic rate income tax.

bhjm

dd95 wrote: »

current plan
early twenties, just under 20k salary living with parents in the NE. Currently putting 200pm in a HTB ISA and remainder into a stocks and shares ISA and premium bonds. Currently contribute 5% to pension matched by employer. No salary sacrifice.
future
looking to purchase first house on qualification (next few months)
salary is hard to predict but should be looking at approx 55-60k in ten years and 150k-300k in 20. I would guesstimate i likely retirement age around 60?

your opinions would be greatly appreciated. i just thought contributed a nominal amount monthly to a LISA will add up over the years (will increase these as salary increases)

if im allowed to give an advice. If you can and its possible with the employer - move the pension contribution to salary sacrifice, if this is not possible - i would look at the pension provider you are using - like what and how much they do charge you - this can make after 50years savings for the pension quite a different. depending on YOUR ! nature to risk - you might can move this to a higher risk/higher return or lower risk / lower return funds or strategies.

HTB / LISA - saving for pension in a LISA will be beaten by SIPPs usually. HTB (help to buy) is only good for the better interest you receive compared to the (cash)LISA AND ! if you buy the house very soon before the LISA is one year old.Please be aware of further different advantage and disadvantages for each HTB ISA vs LISA. Like maximum price for the property, how long the ISA has to been opened, what the Bonus can be used for, withdrawal penalties for the LISA etc. Might be worth to transfer the HTB to the LISA if you want to gain a tax advantage.

bhjm

here`s a helpful link/overview when to go for the LISA as a Pension option or for a alternative Pension System like SIPP etc.

https://www.moneysavingexpert.com/savings/lifetime-isas/#pension-2