Lifetime ISA & House Deposit

Wardee

Hi all, I am in the process of just starting to attempt to save for a house deposit, I have a LISA that I pay a little into each week but wondering if I could actually use it to save for a deposit? Unfortunately I have had a mortgage but it was 20+ years ago hence why I was using the LISA as more of a retirement fund to take advantage of the 25% bonus at least. I'm just trying to find out if there is a time frame on ever owning a house, are the checks that thorough that they do? I'd love to be able to use the bonus towards a deposit if it was at all possible. I'm sure the answer is a big no but I thought I'd double check first before. Thank you.

george4064

Big no. You wouldn’t pass the checks that your solicitor would undertake, you could ofcourse lie but that would be fraud and you would be exposing yourself to much worse potential consequences.

Wardee

Such a shame, isn't the past just a wonderful thing sometimes! Guess the next best thing is a paltry 1-2% savings account then? Thank you for clarifying though.

grumiofoundation

Is your LISA a stocks and shares LISA or cash? 

Wardee

It's a cash LISA that I opened up, does that make a difference?

grumiofoundation

If you are saving for retirement then stocks and shares rather than cash would be a seen as the more normal option - since you would hope over 20+ years stocks and shares would outperform cash.

Although if you are over 40 there are limited options available for transferring cash LISA to S and S LISA (as in OP you say you made a mortgage 20+ years ago this may well be the case). 

If this is the case a pension will likely be a better option for retirement savings than cash LISA - so would be worth looking at instead if looking to save more for retirement. 

Wardee

Thanks, that does make sense and something I didn't really think about when opening the account. I should have asked beforehand but it was just in case I could use it for a deposit that I went for the cash option. I don't have a substantial amount in the cash LISA anyway so should I just stop payments to it now and open a s&s isa/pension instead? I do have a workplace pension but I'm behind with that as didn't open it until later in life (not quite 40 yet) so wanted something alongside it. Always feel like I'm playing catch up after making so many wrong decisions!

masonic

The first thing you should look at is increasing contributions to your workplace pension. That may be more tax efficient if you can pay in via salary sacrifice. If you are a higher rate taxpayer then a workplace or alternative pension would be very worthwhile. A S&S LISA has a place in retirement planning as you get the equivalent of basic rate tax relief on the way in, but unlike a pension, it is entirely tax free on the way out, so allows you to take further tax free income above the personal allowance.

Cheese1990

If you are not quite 40 yet then open a S&S LISA before you do turn 40 as it's next to impossible to do so after that way the money you have already payed in will be able to be invested between now and 60 and you can keep adding to it till you're 50

Albermarle

If you have a workplace pension then there is often no need to open a new pension to make extra contributions, unless for a specific reason.
It sounds like you are behind where you should be in respect of saving for retirement , so adding just another couple of percent of salary is very unlikely to solve the issue, so add as much as you can.
Also take time to see how your workplace pension is invested , as it can pay to change it . Usually you can see all the details on line if you have the password etc.

Wardee

Thanks guys, I will look to open a S&S LISA as it'd still be nice to have a long term savings pot to look forward to for the next 25 years.

Had my work pension for 6 years so a good 10 years working without contributing to one, sometimes I just don't know what to do. Should I perhaps look at speaking with a financial advisor? I also have debt (£10k down from £23k 3 years ago) so funds have been extremely tight in this time. It's not been a lot of fun but it's massively opened my eyes to the importance of budgeting (YNAB) and looking after your money.

Appreciate all of your replies.