LISA for an over 40

eskbanker

LL_USS said:
I moved my L-ISA to Tembo and it's only 4.3% variable and now have to wait till the end of this financial year to move out of it to Dodl. Doh!

Why would you have to wait?

LL_USS

eskbanker said:

LL_USS said:
I moved my L-ISA to Tembo and it's only 4.3% variable and now have to wait till the end of this financial year to move out of it to Dodl. Doh!

Why would you have to wait?

@eskbanker A few places online, for example this one https://www.onlinemoneyadvisor.co.uk/savings-and-investments/isas/lifetime-isas/how-many-lifetime-isas/, say that we can have multiple LISAs but not open both in the same tax year. Moreover, I have used up the allowance this year. I opened Tembo earlier this year, moved the account from Money box over when the bonus rate period ended, and I have just paid in 4K.

masonic

LL_USS said:

eskbanker said:

LL_USS said:
I moved my L-ISA to Tembo and it's only 4.3% variable and now have to wait till the end of this financial year to move out of it to Dodl. Doh!

Why would you have to wait?

@eskbanker A few places online, for example this one https://www.onlinemoneyadvisor.co.uk/savings-and-investments/isas/lifetime-isas/how-many-lifetime-isas/, say that we can have multiple LISAs but not open both in the same tax year. Moreover, I have used up the allowance this year. I opened Tembo earlier this year, moved the account from Money box over when the bonus rate period ended, and I have just paid in 4K.

If you are transferring a LISA then you are not opening multiple LISAs.

LL_USS

@masonic thank you. I will make a request and see what Dodl says.

UPDATE: I tried downloading Dodl for my own LISA but it seems I still need to deposit min 100 but I've just used up 4K allowance this year so I'll wait till 6 Apr next year to open S&S LISA with Dodl then - feel better that I still delay this a bit longer whilst I learn more about investing. I'll start from Lars Kroijer, thank you :-). Have a nice day!

LL_USS

UPDATE: I have emailed and asked Dodl about my case and this is their reply below. In short yes I can transfer to Dodl without topping up as opening a new account. The issue regarding paying the fee is not straight forward. I asked if I could have another Dodl account at the side of LISA account to pay for fee running S&S LISA but no we can only pay for the fee from the cash balance on Dodl (LISA) account.

"I can confirm you do not need to fund your account straight away, you can initiate the transfer without funding. So, you will not need to wait for next tax year.

On Dodl the only way to pay your fees is by using the available cash balance in your Dodl account.

If you have used all of this years ISA/LISA allowance you will need to sell some of your investment(s) in order to cover the outstanding fee.

We are looking into different ways in which you can pay off your outstanding fees and if any of these alternative methods become available we will announce this to all of our customers".

masonic

It is more cost effective to pay out of cash in the LISA - effectively a 20% discount after the government bonus.

Over at AJ Bell there is more flexibility on fee payment. You can credit a trading account and use that. So wasn't expecting Dodl to work differently.

LL_USS

masonic said:

It is more cost effective to pay out of cash in the LISA - effectively a 20% discount after the government bonus.

Over at AJ Bell there is more flexibility on fee payment. You can credit a trading account and use that. So wasn't expecting Dodl to work differently.

@masonic thank you very much. I will ask them if I can set up a trading account as with AJBell. And if not then I will set up a cash LISA at the side to pay for the fee in the S&S LISA.

EDIT: Q&A with Dodl:

Q: ...so does it mean the cash balance has to have enough from interest/ trading profit or does it mean even when we pay in 4000 that year, even with a loss, the £20 fee taken out is from the principle money (of 4000) is not treated as withdrawal and thus no 25% penalty? Sorry I just want to clarify first before making the move. Thanks.
A: Yes, that is correct. Any charges you incur will not be treated as withdrawal and therefore incur a penalty

UPDATE (April 2025): Transferring to Dodl LISAs all okay. Investors are asked to leave some cash uninvested to pay for fees (otherwise the platform sells some investments to cover the fees). 

Current fees: Monthly fee applied, with a minimum but no capped fee - meaning if the invested sum is not much then you may have to pay more fee than what you earn, and you don't benefit when having a very big sum invested when using the platform. But the fee seems to be quite competitive overall (0.15%). If you don't invest and just keep the money all in cash in the account then no fee. Low platform fee so you will need to pay for example the fees invoved in transferring to a foreign currency.