Missing a trick by not having a Lifetime ISA?

Zola.

I am under 40, have a mortgage, wife, kids..  the thought crossed my mind about the Lifetime ISA just now and I wanted to gather thoughts around if I am missing a trick by not having signed up. I know the cut-off is 40. 

We are saving pretty diligently into pensions, as well as investing aggressively every month into our S&S ISAs... but should I be looking at the Lifetime ISA also?

It would be great if it could be used for a second home, but that doesn't appear to be the case. So the thought of it being locked away to aged 60 is a bit annoying, but that's probably what the workplace pension will end up being anyway? Can't see the goalposts being moved any closer, that's for sure...

Curious to hear thoughts from those who have it / have looked at it etc. 

ColdIron

If I was under 40 and a basic rate taxpayer I'd open one (pensions beat LISAs for higher rate taxpayers) Similar advantages to an ISA but a 25% uplift on contributions

Once you start taking your state pension I can see the advantage of a tax free income stream once the SP eats up most of your personal allowance. That you can't access it until 60 I see as a benefit and not a disadvantage

If nothing else open one with a quid to keep your options open once past 40

gtat

I am 34 and I have opened a LISA to help bridge the gap between early retirement (hopefully!) and state pension/ DB pension. 

MDMD

ColdIron said:

If nothing else open one with a quid to keep your options open once past 40

Although you really need to ensure you transfer before 40 as there are numerous threads of people wanting to transfer after 40 and being unable to

https://forums.moneysavingexpert.com/discussion/6311050/over-40s-being-prevented-from-transfering-lisas-to-a-new-provider/p1

ColdIron

Or do the research now and avoid the need to transfer. There aren't that many providers

Alexland

We have been doing full contributions into our S&S LISAs since launch and will probably gift the money to our kids when we are 60+ and they are in their 20s looking for help with house deposits, weddings, etc.

noclaf

I would have a serious think about whether you really need one. I opened mine a number of years back as the plan at the time was to use it to purchase my first property....plans changed and even though I could still use it towards a property there is a chance I will inherit a share in a property, before I actually buy a property. If that happens, then effectively all I can do is use the LISA for retirement or pass it along to my child...and it's a reasonably decent amount I have built up including at least 5 years worth of HMRC contributions. It's one extra account that I have to manage and review on a ongoing basis and ensure I have enough cash to cover fund and platform fee's etc I am in 2 minds whether I will make any further contributions to mine or just use my S&S ISA instead for annual allowance (£20k).

george4064

My OH and I have been contributing in full to our LISAs, we intend to use them when we’re 60 to payoff our IO mortgage.

MX5huggy

I don’t think a LISA is an unmissable opportunity for saving for retirement. If you are saving the maximum in pension (either hitting tax relief, annual or lifetime limits) then maybe. If you can salary sacrifice or are a higher rate tax payer then pension wins. 

LISA are considered and you would be expected to use them if you ever claimed a means tested benefit or went bankrupt. 

They are subject inheritance tax whereas pensions are not. 

Albermarle

In simple terms 

LISA + 25% government top up and no tax on way out . Can not take until 60.

S&S ISA - no top up and no tax on way out , Can take at any time but from an investment point of view should still be seen as a long term option ( >10 years ) 

Pension - with tax relief  for basic rate taxpayer but some tax on way out gives a  Minimum tax gain 6.25%. However in certain circumstances it can be significantly more ( higher rate taxpayer , paying contributions by salary sacrifice, not paying tax on way out due to low income ) Currently can take from 57 but this will increase at some point.