Bail on LISA or keep?

Morrigan_2020

Thanks, I think I understand that!  

I think I'll withdraw from my cash LISA and pop it in my Lloyds monthly saver at 1.5% for a few months until April then open a new Nutmeg LISA.  I like the idea of the socially responsible one, either that or the fully managed.

Morrigan_2020

Although if I withdrew now and put it straight into nutmeg would it not get the bonus again? That seems too easy so I assume not, would I only get bonus on anything over and above what I've already used?

Alexland

Nutmeg socially responsible portfolios have a total cost over 1% pa ouch. That could seriously damage returns. If for example stock markets only return 2% above inflation for the next 10 years that means you are experiencing all the volatility and giving away half the real return in fees.

Morrigan_2020 said:

Although if I withdrew now and put it straight into nutmeg would it not get the bonus again?

Have you made any contributions of new money into the existing LISA this tax year (since 6th April 2020)? If not you are fine to open and contribute up to £4k into a new LISA this tax year no need to wait until 6th April.

Morrigan_2020

Alexland said:

Nutmeg socially responsible portfolios have a total cost over 1% pa ouch. That could seriously damage returns. If for example stock markets only return 2% above inflation for the next 10 years that means you are experiencing all the volatility and giving away half the real return in fees.

Morrigan_2020 said:

Although if I withdrew now and put it straight into nutmeg would it not get the bonus again?

Have you made any contributions of new money into the existing LISA this tax year (since 6th April 2020)? If not you are fine to open and contribute up to £4k into a new LISA this tax year no need to wait until 6th April.

The socially responsible fund has the same fee as the fully managed fund, of 0.75%, doesn't it?  

I have paid in this tax year, are you only allowed to pay into one product per tax year?

Alexland

Morrigan_2020 said:

The socially responsible fund has the same fee as the fully managed fund, of 0.75%, doesn't it?  

Yes but the socially responsible portfolio's fund manager costs are 0.31% compared to the fully managed at 0.19%. My view is that over the long term the fixed allocation option seems just as likely to do well and has lower Nutmeg portfolio and fund manager costs.

Morrigan_2020 said:
I have paid in this tax year, are you only allowed to pay into one product per tax year?

Yes you can only contribute to one LISA each tax year unless you transfer it and continue contributing with the new provider.

Morrigan_2020

Thank you, I'm just having a good browse on the Nutmeg site now, its very helpful! 

Albermarle

 I like the idea of the socially responsible one, either that or the fully managed.
I think you are already moving in a positive direction regarding investing, and if the socially responsible fund makes you feel more comfortable with investing , then that is fine . Despite the higher charge it should still produce better results than a cash/interest account .
Nutmeg socially responsible portfolios have a total cost over 1% pa ouch
Alexland's comment is perfectly valid, but just be aware that he is a larger investor and very cost sensitive ( an MSE champion ) . The main thing for you is start building up the pot asap and then at a later stage you can review and see if you can maybe find a cheaper option.

Morrigan_2020

Thank you, I did the Nutmeg questionnaire and came out as Medium for risk so maybe I'm as averse as I thought I was!  

Good to have a plan in place, might be nice to know I have the option of maybe working fewer hours or a less stressful role in my sixties, seems a long way off but the first 36 years of my life have flown by so I'm sure the next 24 will too. 

P3

I went with nutmeg LISA, balance, 60/40, since the government is giving me 25% bonus, unless the market dropped more than 25% I'm quid in, so far it's up 15% in 3 and half yrs.
£15k my own money, £3750 from the government, £2770 'profit'