Transfer a cash Lifetime ISA (LISA) to stocks and shares LISA?

7 Posts

Hello
I opened a cash LISA (Skipton) a few years back with the intention of using it towards my first house purchase. I've now finally bought a house, but was lucky enough (and unlucky as well!) that the purchase price was just in excess of the £450k LISA limit - meaning I'm stuck with the cash LISA unless I want to forfeit the ~£250 per government bonus (and miss out entirely on each £1000).
A friend suggested switching to a stocks and shares LISA instead, and I spoke to Skipton and they said I should be able to do this, but as they don't offer one I need to find another provider. So far, however, I have not been able to find any way to actually achieve this. BMO are the only provider I've found so far who claim to accept LISA transfers, but they told me that I can't do it because it would involve opening a new LISA and I'm already over 40 so this isn't possible.
Am I really stuck with the cash LISA (not a very attractive investment opportunity for the next 20 years) or have to lose out on a sizeable sum just because I was lucky enough to afford a house that was just over the LISA threshold...?
Many thanks for your help!
I opened a cash LISA (Skipton) a few years back with the intention of using it towards my first house purchase. I've now finally bought a house, but was lucky enough (and unlucky as well!) that the purchase price was just in excess of the £450k LISA limit - meaning I'm stuck with the cash LISA unless I want to forfeit the ~£250 per government bonus (and miss out entirely on each £1000).
A friend suggested switching to a stocks and shares LISA instead, and I spoke to Skipton and they said I should be able to do this, but as they don't offer one I need to find another provider. So far, however, I have not been able to find any way to actually achieve this. BMO are the only provider I've found so far who claim to accept LISA transfers, but they told me that I can't do it because it would involve opening a new LISA and I'm already over 40 so this isn't possible.
Am I really stuck with the cash LISA (not a very attractive investment opportunity for the next 20 years) or have to lose out on a sizeable sum just because I was lucky enough to afford a house that was just over the LISA threshold...?
Many thanks for your help!
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In theory should be no problem to do what you want to do but in practice it seems difficult .
There are not many S&S LISA providers but there are more than BMO.
AJ Bell & Nutmeg are two that come to mind.
https://forums.moneysavingexpert.com/discussion/6290953/lisa-after-40/p1
https://forums.moneysavingexpert.com/discussion/6251422/lisa-transfers-over-age-40/p1
I don't know how many other people are in my position, but I have essentially been 'mis-sold' a government house-buying incentive - because I was under the impression that the only reason that I should have to lose out was if I desperately needed the money back in the mean-time, thereby losing the 6.25%. Now I have bought a house over threshold - but when taking it out this never looked possible as I was intending to buy 'in the next few years' and I was looking at houses far below the threshold. Do I have any chance in this area with the Financial Ombudsman perhaps?
While I agree that a S&S LISA makes more sense than a cash one for long-term accumulation, that still doesn't mean that the unavailability of over-40 S&S transfer options is anyone's fault, so there isn't a FOS angle, and there's nothing stopping you from leaving the money in the cash one, even though it may not be particularly productive there.
I've now double-checked my previous correspondence, and it was actually AJ Bell who said that 'it is an HMRC regulation' that I cannot open a new LISA to transfer my existing one into - BMO said they just don't accept LISA transfers...
The government rules are clear, as per https://www.gov.uk/guidance/managing-lifetime-isa-applications-and-accounts#who-can-open-a-lifetime-isa
Individuals who are 40 or older
Individuals who are 40 or older are not eligible to open a Lifetime ISA. They can however open an account to receive:
I have recontacted AJ Bell to see if they will at least explain why they cannot accept the LISA transfer. It is likely that it is indeed a programming 'feature' in the website - but if that is the case perhaps it might be possible for them to do it 'by hand'... we'll see!
"Unfortunately we are unable to accept applications from customers who are over 40 as we are not able to differentiate between requests for transfers and new LISA accounts. We are currently looking at ways round the issue but at the moment we do not have a timescale for this."
This does sound like simply a software issue - but if they are claiming to be 'currently looking at ways round the issue' then presumably the FOS won't be able to help much either...