Moving Pension Funds to a LISA

meesh13

Hi,
I am looking at moving some of my pension fund into a LISA.  I know as a general rule its not a great idea.  However I am confident in my decision and am quite fortunate to have built up a fair pension pot at a young age and have plenty of scope to still meet my retirement goals.  I am not a homeowner and current circumstances mean this would not be possible for a lot of years hence looking at this option.
I have spoken to my current occupational pension provider and they have confirmed that I can transfer funds out into a LISA.  A couple of questions on this;
Are there only specific LISA providers that are able to accept funds from a pension scheme?  
Transferring in from a pension scheme - does this mean you will not get the 25% bonus?
I can find little to no details on this online so appreciate anything anyone can add to this.
Thanks

eskbanker

meesh13 said:

I have spoken to my current occupational pension provider and they have confirmed that I can transfer funds out into a LISA.

Really?  Have they put this in writing?

Alexland

meesh13 said:

I have spoken to my current occupational pension provider and they have confirmed that I can transfer funds out into a LISA.

They are wrong - if you are young it would be treated as an unauthorised payment and tax charges would be payable. The person you are talking to probably doesn't understand LISA rues and might think it is similar to a SIPP for which they may allow you to transfer out benefits.

A common misunderstanding is that a LISA is not a type of pension it is just an account that you can use to accumulate money for either making a qualifying property purchase and/or use the money for anything you want from age 60.

meesh13

eskbanker said:

meesh13 said:

I have spoken to my current occupational pension provider and they have confirmed that I can transfer funds out into a LISA.

Really?  Have they put this in writing?

I do actually have it on email.  I was surprised to be fair!

FirstTimeSolo

As above. You can only access your pension funds early by paying a penalty. Workplace pension can be transferred to SIPP but not anything else. 

dunstonh

I am looking at moving some of my pension fund into a LISA.

You cant.

I know as a general rule its not a great idea.

As you cant, it is not a general rule.

I do actually have it on email.  I was surprised to be fair!

Occupational pension administrators won't necessarily know all the tax wrappers and possibly thought you were referring to your pension providers name or abbreviation.  Don't assume they know what a LISA actually is.

meesh13

Alexland said:

meesh13 said:

I have spoken to my current occupational pension provider and they have confirmed that I can transfer funds out into a LISA.

They are wrong - if you are young it would be treated as an unauthorised payment and tax charges would be payable. The person you are talking to probably doesn't understand LISA rues and might think it is similar to a SIPP for which they may allow you to transfer out benefits.

You'd hope they knew what they were talking about wouldn't you.  This makes sense and explains why I can't find much information out there!
It's really frustrating having so much money sat there while paying a fortune in rent each month!

Alexland

meesh13 said:

I do actually have it on email.  I was surprised to be fair!

They are still wrong, just in writing.

Even if they released pension money early the penalties are high.

https://www.gov.uk/guidance/pension-schemes-and-unauthorised-payments#tax-charges-on-unauthorised-payments

meesh13 said:

You'd hope they knew what they were talking about wouldn't you.

Not really they were probably only trained on the product they provide and if they don't have a general interest in the financial services industry might lack knowledge of any other products you might be talking to them about.

It's really frustrating having so much money sat there while paying a fortune in rent each month!

Yes that does sound annoying but probably quite unusual as most people would probably have prioritised buying their first property before increasing their pension contributions to a level where they then became that substantial.

meesh13

Alexland said:

It's really frustrating having so much money sat there while paying a fortune in rent each month!

Yes that does sound annoying but probably quite unusual as most people would probably have prioritised buying their first property before increasing their pension contributions to a level where they then became that substantial.

I was fortunate to be part of a DB pension scheme.  I have since transferred out hence the large lump sum.
Starting out homeless and in a low income job has given very little room for savings.  Thankfully hard work will soon pay off and I will be in a position to start saving, just not as soon as I would have liked!