LISA: If I close my LISA , I know I lose the 25%bonus but do I still retain the Interest?

chris112

I'm thinking about opening a LISA, but I was wondering if I decide to close the account after say 10 years, would I lose the 1.5% interest I gained in this period, I know I'd lose the 25% bonus,

is 1.5% interest the best out there?
Is it easy to switch between LISA's, Once opened?
I'm thinking about opening a LISA with The Nottingham: https://www.thenottingham.com/savings/products/lifetime-isa/

masonic

Potentially you'll lose more than just the 25% bonus. Previously the penalty was 25%, which is a net loss of just over 6%. Currently the penalty is 20%, which completely removes the 25% bonus, but doesn't penalise further. The new penalty is thought to be temporary.

If you close the LISA within the first few years, it would be prudent to assume you'll lose the bonus, all interest and some of the capital. If you hold it for 10 years, you might not lose any capital, and might retain some of the interest, depending on rates and penalties in the future. If you hold it until age 60, or use it to buy your first home, you'll retain the bonus and all of the interest.

bogleboogle

Why 1.5%? The Nottingham Lifetime ISA seems to offer a 1.25% interest rate, not 1.5%? 

gaka87

Hi all. I’m thinking of transferring my Help to Buy ISA to a LISA. When the LISA is open, will I be able to open and deposit money into a Cash ISA? Not sure of this, as I have already put money into a Help to Buy ISA in this current tax year? Appreciate your advice?

masonic

If you transfer the current year money in full from your HTB ISA to your LISA using your LISA provider's transfer process, then you'd be free to open and fund a separate cash ISA in this tax year.