Quick refresher on the AJ Bell charge before maxing out L-ISA

JustAnotherSaver

So unless it's changed, AJ Bell charge £1.50 per transaction.

£4k max in the LISA.

So just a quick one - do you pay in £4001.50 to AJ Bell & then buy in to one of the funds you currently hold? I don't want to fall foul of max contribution rules which is why I'm asking.

Alistair31

You will only be able to do £4k

JustAnotherSaver

Alistair31 said:

You will only be able to do £4k

So I can only invest £3,998.50 then?

Alistair31

JustAnotherSaver said:

Alistair31 said:

You will only be able to do £4k

So I can only invest £3,998.50 then?

I believe so. Unless you have another account on there with some cash in. 

I could be wrong of course as it has been a while since I put the first £4K in and I’ve maintained a small cash balance since. 

JustAnotherSaver

Hmm, bit of a strange one. I've just logged in to see if I can message them maybe & I've never noticed it before but I have £546 in cash there. I don't ever remember putting money in & then not investing it straight away.

Alistair31

JustAnotherSaver said:

Hmm, bit of a strange one. I've just logged in to see if I can message them maybe & I've never noticed it before but I have £546 in cash there. I don't ever remember putting money in & then not investing it straight away.

Dividend payments? Government bonus on previous contributions?

go to transaction history or cash statement and see? 

Alexland

JustAnotherSaver said:

So I can only invest £3,998.50 then?

Unless you have already organised with them to pay the ongoing charges from an unwrapped account remember to leave some cash in the LISA to pay their fees at least for a few months until your bonus cash is added. Then when the bonus cash is added invest most of it (another £1.50 if a fund) and leave some cash to cover fees until you can next contribute. In determining the level of cash to leave consider investment growth and leave a margin for error in your calculations.

masonic

JustAnotherSaver said:

Alistair31 said:

You will only be able to do £4k

So I can only invest £3,998.50 then?

Depending on your investment, there will be fund charges and ongoing management charges. These will also come out of the balance of your chosen funds and cash balance of your LISA respectively. Don't invest all of your balance unless dividends will cover any ongoing fees.

JustAnotherSaver

Ahh that makes sense as to what it is then.

Last tax year I only put £2000 in.

25% lift will give it as £500 plus whatever I put in before that (can't remember & their system doesn't seem to want to go beyond 12 months) - wasn't much.

Alexland said:

JustAnotherSaver said:

So I can only invest £3,998.50 then?

Unless you have already organised with them to pay the ongoing charges from an unwrapped account remember to leave some cash in the LISA to pay their fees at least for a few months until your bonus cash is added. Then when the bonus cash is added invest most of it (another £1.50 if a fund) and leave some cash to cover fees until you can next contribute. In determining the level of cash to leave consider investment growth and leave a margin for error in your calculations.

Ahh balls, I wasn't aware of that.

They're still probably one of the cheaper ones around. Doesn't mean I have to like these £1.50 charges each time though. That's why I'm putting the lot in in one go rather than spread.

JustAnotherSaver

Well I'm impressed with their quick reply time....

Thank you for your message.

Please be advised, we can not take the dealing charge from outside of the ISA wrapper. Therefore in theory, the maximum you can invest
is £3998.50 in addition to the £1.50 dealing charge.

However, I can confirm that AJ Bell funds are free to purchase which would allow you to invest the full £4000.

If you have any further queries, please feel free to contact us.

I'm assuming that by their end comment, they mean investing in to their own funds as in I'm currently invested in HSBC Global Strat Dynamic & if I continue with that then it's £1.50 a time but if i opt to have a second fund in the account and it was to be an AJ Bell fund then there'd be no charge.

Not really something i'm tempted to do for the sake of £1.50 to be honest.

Though it was my error to think that the £1000 (in event of investing £4k) would be put in to your fund also and not a cash account.

So if i've understood this right, you can never really invest £4k year on year. Well, you can but your 25% bonus would never be invested.

So year 1 you invest £4k, you then get £1k bonus but that £1k bonus is in a cash account.

Year 2 if i've understood right, you have the option of investing £3k plus last years £1k or £4k up front but if you do that then your £1k bonus for year 2 will go in the cash pot again - not invested.

If i've understood this right then is that how all providers operate? As year on year that's going to be quite an amount just sat in cash doing nothing.

Alistair31

You can invest the £1000 as soon as you receive it.

I think you are overthinking this. AJBell set out things very clearly here

https://www.youinvest.co.uk/sites/default/files/guide/file/AJBYI_Guide_LISA.PDF