AJ Bell or Nutmeg for S&S LISA?

kenzie123

Would appreciate advice here - I'm new to LISA savings, and keen to open one ASAP.
AJ Bell rates are 0.25% while Nutmeg is 0.75% but fully managed.
Can anyone advise on which I should go with?
Also - it's not clear how to differentiate between S&S LISA and normal Cash LISA on the websites, in terms of which one you want to choose - is that option listed further into the application? 
Aim to open an S&S ISA as well after the LISA is up and running.
Thank you in advance.

Alexland

Have you checked first that you wouldn't be better making extra pension contributions which could offer employer contribution matching, avoidance of higher rate tax or national insurance or reduce your income to qualify for child benefit depending on your circumstances?

AJ Bell and Nutmeg only offer S&S LISAs (so won't ask if you want a Cash LISA) suitable for investing for 5-7+ years preferably much longer probably at least 20 years until age 60. On AJ Bell you would also need to pay £1.50 every time you invest money in a fund. If goring with Nutmeg then their fixed allocation is cheaper at 0.45% and there doesn't seem to be any evidence it doesn't do as well. With Nutmeg you will get very little choice (pick strategy and risk level) and with AJ Bell you will get to choose from thousands of funds or exchange traded assets. Once the LISA gets big enough there is the chance to cap the ongoing fees at AJ Bell.

dunstonh

AJ Bell rates are 0.25% while Nutmeg is 0.75% but fully managed.

You are not comparing like for like.   They are very different propositions.  AJ Bell is a platform.  Nutmeg is a product provider.

AJ Bell needs you to pick your investments and the charges for the investments are on top of the platform charge.

Nutmeg is robo-guidence provider and has a limited range of options but uses low cost underlying funds but charges more than if you held similar funds directly (or a multi-asset fund with similar holdings on a platform.

You could say that Nutmeg is a bit like an all-in-home home cinema system.   It won't be the best.  You can't do much wrong as they prevent you from doing so and its simple to use.  A J Bell is like your specialist home cinema system where you buy all the bits separately and can mix and match.  Far more in choice, could be cheaper or more expensive and more scope for you to make mistakes as you are controlling things.  But get it right and you get better returns. 

An experienced investor wouldn't likely go near a robo-guidence provider.  However, they are ideal for people starting out or small amounts.

Nurse2047

sorry to jump on this thread-can i ask i have a cash LISA with Moneybox-i am 42 and pay more into my NHS work pension via additional payments to gain tax benefits. Even though a small amount in my cash LISA - 2k is it still worth transferring to a S+S LISA (i pay in £100 a month) or leave as a cash LISA? Thankyou 

Alexland

MFW2026 said:

sorry to jump on this thread-can i ask i have a cash LISA with Moneybox-i am 42 and pay more into my NHS work pension via additional payments to gain tax benefits. Even though a small amount in my cash LISA - 2k is it still worth transferring to a S+S LISA (i pay in £100 a month) or leave as a cash LISA? Thankyou 

If this is for age 60+ then a Cash LISA is likely to on average pay a lower interest rate than inflation so you are burning your bonus on the reduction in spending power as the price of goods and services goes up. Cash LISAs are only really suitable for people buying a first property in the next few years.

18 years between age 42 and 60 is roughly 2 economic cycles so plenty of time for a S&S investment which if a suitable level of risk is taken should deliver above inflation returns. The problem is that Moneybox previously said they were unable to transfer customers between LISA types and there are only 2 other S&S LISA providers we are aware of who will accept inbound transfer requests for over 40s.

One is Onefamily who have very poor performing investments and the other is EQi (you would need to use their paper transfer form and pick your own funds). EQi's pricing is currently very attractive however they are being taken over by Interactive Investor who might increase the charge to their standard £9.99 per month including one adhoc trade and free regular investing. This charge would only be economic if you were committed to making better use of your LISA (eg using the full allowance each year) or you had another account with II covered under the same charge such as a S&S ISA and managed you trades within the allowance. If you did want to switch to EQi then I would act quickly as when II took over The Share Centre they stopped people applying for new LISAs as II took the decision to not offer LISAs to new customers.

grumiofoundation

MFW2026 said:

sorry to jump on this thread-can i ask i have a cash LISA with Moneybox-i am 42 and pay more into my NHS work pension via additional payments to gain tax benefits. Even though a small amount in my cash LISA - 2k is it still worth transferring to a S+S LISA (i pay in £100 a month) or leave as a cash LISA? Thankyou 

Until 5th April 2021 withdrawal penalty is temporarily reduced to 20% (so you just lose your bonus). 

If you are not planning to contribute more to LISA over the next 8 years you could consider withdrawing it and contributing to pension (believe with NHS pension you can buy additional amounts of DB pension?). As Alexland says cash ISA will likely lose out to inflation and II charges (if applied) could eat up a lot/all of your gains.

Nurse2047

Thankyou all, I pay the full amount of £6000 per year as additional payments from my salary into my NHS pension, however can use my NHS AVC with prudential to pay more. Thankyou i will liaise with Moneybox and look to transfer out. Thanks for the advice