We want to hear about your Lifetime ISA (LISA) experiences

MSE_Laura_F

Are you planning to use your Lifetime ISA (LISA) towards your first home? Have you used one already, or tried to? We’d like to hear about your experience.Got a second-hand story about a friend or relative using a LISA? We'd love to hear that too. Or better yet, ask them to register for a Forum account and post about it themselves.Please also let us know: what area of the country are you in?
(Be careful not to share your full address here.)There’s a bumper Lifetime ISAs guide thread for you to discuss LISAs more generally, but we’re keen to read about individual experiences here.If you’re not comfortable sharing your story here, please feel free to PM me (MSE_Laura_F) instead.

nik112233

I wanted to share my recent experience with using a lifetime ISA to purchase our first property in Leicester. My wife and I had each been saving for three years and finally bought our dream home on 15th May 2022. However, we did encounter a small issue that I thought might be helpful to share with this community.

The main challenge we faced was the time it took for our solicitor to obtain the funds from Newcastle Building Society - it was approximately six weeks. This was longer than we had anticipated, but we were grateful to finally receive the funds we needed. Additionally, our solicitor charged an extra £100 for dealing with a lifetime ISA. 

While this extra cost isn't ideal, I understand that solicitors have to do extra work dealing with lifetime ISAs, so perhaps it's to be expected. However, I would recommend anyone else in a similar situation to double-check the fees before proceeding. 

Overall, using a lifetime ISA was a wise investment for us as it gained us £8000 extra for our house purchase and we're delighted with our new home

TippingGreen42

We bought a house in Gloucestershire in November 2022, a new build. We used our Lifetime ISA’s (2x. 1 mine, and one my partners) we were supposed be to be charged 2x £100 but our solicitor wrote it off as we did most of the work for it. We had to fill in manual paperwork to get it released, then email it to our LISA provider. 

What we did realise;

Lifetime ISA’s aren’t designed for new builds. If you release your LISA for your deposit, you must complete on your property within a max of 180 days; By HMRC regulations. However, this is built up of 90 days with OPTIONAL further extensions (max 2x 45 day extensions). So if they don’t approve this, you lose 25%. With most off-plan new builds, it is more than 90 days from paying deposit to completion (plus delays). 

We completed with 20 days left on the LISA timer (applied for a 90 day extension). If this has elapsed, we would have forfeited our 25% as we would have breached the 180 days. 

What we also realised, with Paragon bank; the forms must be sent by a SRA approved solicitor. NOT a conveyancer. This delayed our deposit completion, and they do not let you know if the form wasn’t successful. They will not release to a conveyancer. 

In addition, we realised that not many LISA’s actually get released. Our solicitor had never released one before, so it might require a bit of hand holding with the solicitor if you’ve got the knowledge. Even the bank we had a LISA with had to ask a few people of questions we had. It’s much based around the HMRC’s slightly fluid conditions. 

Finally, you must give the bank at least 30 days notice to release the funds. If you’ve got a date to exchange, or a new build serving 14 days notice, this is extremely hard to time. We found that it was a lot of back and fourth chasing to ensure it was released on time, but if pushed I reckon they could do it in one working day. However, only if it was their wrongdoing. 

Overall, whilst it was a massive benefit. Absolutely not designed for new builds, but couldn’t have afforded it without it. The 90 days limit is an absolute con personally. 

lukea_a

I’m currently saving for my first home in my LISA. I rent through London Living Rent which means I already live in my new home, renting it, and I have the right to buy it once I have saved enough for a deposit. The problem I worry about is that my 1 bedroom home in London is currently worth approximately £425,000. If it happened to be worth £450,000 or more by the time I have saved enough to buy it in a few years time, I will lose the 25% bonus from my savings.

It is wrong that the LISA property value limit has not risen over the last few years to reflect property prices & inflation.

asajj

Positive experience with Moneybox, particularly about the release of funds. Took maybe a week. I saved into it for four years and the additional £4000 has been more than helpful.
My solicitor also charged extra fee to deal with LISA, which was around £75 i think. 

bakepot

We had a good experience using Moneybox for our LISA. Purchased in May 2022. We stay near Glasgow. 

The whole process went pretty smoothly and the timings all came together fine. Our solicitor charged £100 (plus VAT) for handling the LISA. We paid in a lump sum a couple of months prior to the completion date to take us up to the limit and still got the bonus without issue.  Overall very happy and wouldn't have been able to afford the property without the bonus.

celizs

I saved in my Skipton BS LISA for 3 years before I bought my first home in February 2023. I managed to save about £25,000 including the bonus. All had gone well; I had chosen to have the bonus paid monthly, and seeing my savings increase significantly each month was very motivating. Then I started to investigate withdrawal and I had a sinking dread when I learnt you cannot use the Government bonus for properties over £450,000. The average property price in my city last year was £400,000 and I was considering buying with a friend and together we would have a budget of £450,000. I was absolutely furious at this price cap and that I had ploughed so much money into my LISA over other savings and investments and was facing the prospect of withdrawing less than I put in, if I lost the bonus. In the end I bought a place for less than £450,000 and was able to use my bonus. But I am still mad that the price cap is poorly advertised (only featuring in small print), and has not kept up with property prices in an average city outside of London, let alone if I was buying in London or buying with a friend or partner.

eskbanker

celizs said:

I saved in my Skipton BS LISA for 3 years before I bought my first home in February 2023. I managed to save about £25,000 including the bonus. All had gone well; I had chosen to have the bonus paid monthly, and seeing my savings increase significantly each month was very motivating. Then I started to investigate withdrawal and I had a sinking dread when I learnt you cannot use the Government bonus for properties over £450,000. The average property price in my city last year was £400,000 and I was considering buying with a friend and together we would have a budget of £450,000. I was absolutely furious at this price cap and that I had ploughed so much money into my LISA over other savings and investments and was facing the prospect of withdrawing less than I put in, if I lost the bonus. In the end I bought a place for less than £450,000 and was able to use my bonus. But I am still mad that the price cap is poorly advertised (only featuring in small print), and has not kept up with property prices in an average city outside of London, let alone if I was buying in London or buying with a friend or partner.

The property value cap is covered fairly prominently in most LISA material (e.g. within the six 'key things to know' highlighted at https://www.skipton.co.uk/savings/isas/lifetime-isa ), but the scheme isn't really aimed at those looking to buy properties priced as 'average', it's intended to assist those starting out on the bottom rung of the property ladder rather than halfway up it!

bellevie

We had our LISA accounts with skipton, there was a 100 charge on solicitors fees for using LISA despite us doing most of the legwork ourselves.

Combined we had around £15k of our £32k deposit through the accounts. I'd had mine open a few years, my husband just 1 year. The bulk of our savings kicked in after our wedding the year we bought our house, but there's a cap on how much can be put in yearly so we put in as much as we could.

We purchased a 4 bed terraced house in the south east for £320,000. First House, but late buyers mid and late 30s, we'd been stuck in private rental individually for the best part of 15 years, we only managed to start saving bigger amounts when we moved in together.

Overall it was easy to withdraw, if I recall rightly it did take a few weeks. It worked out well for us as my husbands year anniversary was just before our exchange date - if funds are withdrawn before the year anniversary you loose the bonus and get charged a fee. 

I found seeing the bonuses paid motivated me to pay more in, I like seeing the deposit grow infront of my eyes, even in the early days when I was only managing to save £50-100 a month, it soon mounted!

There's nowhere else we'd have gained that kind of 'interest', if the account remains available I'll be encouraging my children to use them, goodness knows at the rate house prices are rising they'll need every penny.

anxiousnow

Saving in a stocks and shares LISA for retirement, alongside pensions, as I am already a homeowner. 

[Deleted User]

It worked for me.

I had one for around five years and had 25k at the end. 5k free did help towards my first home.