Does LISA use have a deadline?

T_Jax

I recently realised the help to buy ISA has to be used by 1 December 2029 is you’re buying a house. 

Is there a similar date or age deadline for using the LISA to buy your first home? I know you can pay in up to age 50 but do I have to withdraw the funds for my mortgage/deposit by a particular deadline. 

eskbanker

Nothing published to the best of my knowledge - the HTB ISA scheme had well-publicised end dates right from its launch but LISA hasn't ever included these, perhaps unsurprisingly given its name and positioning as a (very) long term product, where (some) under-40s will have been paying in money that can't be accessed penalty-free for at least twenty years, and over forty for some....

Cheese1990

You can safely presume deposits can be made until 2054 and withdrawals until 2064 given the current criteria for the account 

masonic

Should the LISA scheme be brought to a close, I can't really see an exit strategy other than having them revert to normal ISAs, in which case you'd still be able to use the money you'd built up to buy a home. Alternatively they could discontinue the bonus on new contributions and keep the terms around access the same.

There is not going to be an age limit, since those over 60 can use the money for anything they like, including buying their first home.

Cheese1990 said:

You can safely presume deposits can be made until 2054 and withdrawals until 2064 given the current criteria for the account 

I guess the significance behind those dates is the assumption someone opening a LISA today will have the right to pay into it until they are 50 and keep the account until they are 60? Is there something in the legislation that prevents future governments from amending/axing the scheme in a way that affects existing accounts?

Cheese1990

masonic said:

Should the LISA scheme be brought to a close, I can't really see an exit strategy other than having them revert to normal ISAs, in which case you'd still be able to use the money you'd built up to buy a home. Alternatively they could discontinue the bonus on new contributions and keep the terms around access the same.

There is not going to be an age limit, since those over 60 can use the money for anything they like, including buying their first home.

Cheese1990 said:

You can safely presume deposits can be made until 2054 and withdrawals until 2064 given the current criteria for the account 

I guess the significance behind those dates is the assumption someone opening a LISA today will have the right to pay into it until they are 50 and keep the account until they are 60? Is there something in the legislation that prevents future governments from amending/axing the scheme in a way that affects existing accounts?

Yes that is the assumption and yes future governments may change the rules but given the history with other products they very rarely immediately withdraw these products completely and allow current subscribers to continue depositing until the end of the term

kuratowski

And to think, at the time when I opened my LISA, I was half expecting them to gradually increase the contribution allowance, while gradually reducing the annual allowance for pensions, because that seemed to be the direction in which this was heading.  Of course, this was several Chancellor of the Exchequers ago.  Nowadays, a more likely outcome would appear to be that the LISA would be left to die.   As above, perhaps closed to new subscribers but existing holders allowed to keep theirs.

masonic

In that case it seems vanishingly unlikely a chancellor would bother to close the scheme at all if there were still an obligation to pay a long tail of bonus claims. There is a tendency to focus on short term wins.

As a cost saving/simplification exercise, setting a sunset on bonus claims (perhaps sweetened with the ability for LISA holders to access their funds penalty free after that date) would be much more attractive. Perhaps the use of LISAs for retirement would deter something like this from happening, as some may be tempted to blow their retirement savings on frivolous things and fall back on the state in later life.