Moneybox Stocks and Shares LISA

bjmese

Hello all. I have a cash LISA that I kept open with £1 when I used it to buy my house, and while I have a work pension I have been thinking about using my LISA allowance to build up some additional retirement funds. I don't want to use a cash LISA for that and although I'm over 40, I've discovered that Moneybox will still accept a transfer from an existing LISA. 

In terms of other possible places to put the money, I have a SIPP and stocks and shares ISA, both with Vanguard. However despite Moneybox's heftier fees (£1 per month, 0.45% platform fee, 0.12 - 0.30% fund fee), investing £4000 a year in their S&S LISA strikes me as the best approach, given the 25% bonus and the fact that at 60 I can access it tax free. 

Does this seem like a sensible plan? The thing that makes me a bit leery is that with Moneybox being the only provider I was able to find that'll accept an over-40s transfer then once I've started paying in, that money is stuck with them even if the fees get even heftier, unless some competitors start acknowledging people over 39.

Sarahspangles

I’m not understanding something - why wouldn’t you put funds into a SIPP, which you can access at 57?

eskbanker

bjmese said:

The thing that makes me a bit leery is that with Moneybox being the only provider I was able to find that'll accept an over-40s transfer then once I've started paying in, that money is stuck with them even if the fees get even heftier, unless some competitors start acknowledging people over 39.

It was reported last week in a thread on the ISA board that AJ Bell (and their Dodl brand) are now accepting LISA transfers for over-40s:

https://forums.moneysavingexpert.com/discussion/comment/79949730/#Comment_79949730

bjmese

Sarahspangles said:

I’m not understanding something - why wouldn’t you put funds into a SIPP, which you can access at 57?

Hi, thanks for your reply. I'm trying to think in terms of tax efficiency - when I access my SIPP I expect I will either still be working or will be receiving both state and work pension, so after the 25% lump sum the SIPP income will be subject to income tax. The S&S LISA money will have received the same boost that the SIPP would have, but isn't taxable on the way out. I do plan to continue contributing to the SIPP as well, but my thinking was that the first 4k a year should go the the S&S LISA.

eskbanker said:

bjmese said:

The thing that makes me a bit leery is that with Moneybox being the only provider I was able to find that'll accept an over-40s transfer then once I've started paying in, that money is stuck with them even if the fees get even heftier, unless some competitors start acknowledging people over 39.

It was reported last week in a thread on the ISA board that AJ Bell (and their Dodl brand) are now accepting LISA transfers for over-40s:

https://forums.moneysavingexpert.com/discussion/comment/79949730/#Comment_79949730

Ah excellent, thank you very much!

Albermarle

Sarahspangles said:

I’m not understanding something - why wouldn’t you put funds into a SIPP, which you can access at 57?

There are various pros and cons between pension vs Lisa depending on your personal circumstances.( in fact they can also  be complimentary to each other ) The most obvious pro for the Lisa is that all withdrawals are tax free, regardless of your other income.

The pros and cons are all set out in the latter part of this article 
Lifetime ISA (LISA): how they work & best buys - Money Saving Expert