LISA bonus

NicolaSian1991

Hi
I am looking at topping up my LISA now we are in a new tax year but I was wondering whether firstly under the current situation, would it be worth/safer just holding onto my money in my current account. And secondly, would there be any risk of the Government deciding they aren’t going to pay the bonuses this year due to what is happening with COVID19?
Thanks

eskbanker

Not sure I follow, why would money be 'safer' in a current account - safer from what?

The LISA scheme rules are what they are so bonuses aren't discretionary but statutorily mandated - nobody can hand on heart guarantee that those rules might not be changed at some point in the future, but I think it's safe to say that if the government was that desperate for additional revenue, there would be a long queue of more suitable sources than the tiny slivers paid to the small number of holders of a niche product!

TL;DR - go ahead....

Alexland

In terms of 'safety' it depends if you have a Cash or S&S LISA and suitably sized emergency cash savings to avoid the need to withdraw.

Cash LISA providers are all FSCS protected up to £85k allthough the low interest rates mean you loose a bit to inflation each year 

S&S LISA investments will go up and down but a sensible asset allocation over 20+ years stands a good chance of going up by more than inflation.

In terms of the government paying bonuses that might stop eventually but I can't see the government not honouring bonuses due on existing contributions if you get the money in before they announce any changes.

snowqueen555

If you might need the cash, keep it for now as you have a year to get that £1000 bonus. I am going to pay in the £4k once my fixed rate saver ends in Nov to ensure I have enough emergency cash.