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

Kaizen917

I got an investment LISA with Dodl. Seems pretty good if you are into holding out for a longer term and the funds list is ok enough for me (even if some would find the choice limited). I was gonna use the LISA for a property but being in London, it feels like the 450k ceiling is getting quite restrictive.

One thing that does bother me is the lack of provider choice. At a glance, it seems like a healthy market until you realize they hardly allow for transfers between each other so whether you are on cash or investment, the actually choise isnt between 5-6 providers but rather 2-3.

Overall, partly because of the above reasons, partly because of the product as a whole seems a bit neglected by the government, Im contemplating to rather not "waste" 4k of my ISA allowance this year but put more towards my SIPP.

MSE_Laura_F

Thanks @Kaizen917 - useful to read.

Did you look for London properties at all or decide to look elsewhere right away?

Thanks, MSE Laura F

Kaizen917

Hi Laura,

Yes I did although work didnt allow me to be very thorough with making too many appointments. At this point, ive simply put the whole property buying on hold so Im just expecting that if the 450k cap is held for whenever I get the ball rolling again, I wont be able to use the LISA towards any deposit. Its fine if it just stays as an investment though.

Gsaver1

Investing in an S&S LISA at the moment. However, one of the funds I invest in, the option to buy or sell has been removed from me as the provider classes it now as a dirty fund. I would like to buy more units as the price is cheaper now but not allowed. They say they will get around to changing it to a fund I can invest in again, this process though has been slow-moving. 

eskbanker

Gsaver1 said:

Investing in an S&S LISA at the moment. However, one of the funds I invest in, the option to buy or sell has been removed from me as the provider classes it now as a dirty fund. I would like to buy more units as the price is cheaper now but not allowed. They say they will get around to changing it to a fund I can invest in again, this process though has been slow-moving. 

Sounds more like a platform issue than something LISA-specific, i.e. it would also impact non-Lifetime S&S ISAs and GIAs too, but no harm in sharing the name of the provider and the fund anyway....

Gsaver1

EQI is the provider. The fund is Schroder Asian Alpha Plus A Inc.

someone

I have a LISA, along with a sizeable (multiple years full allowance) S&S ISA along side some smaller amounts in cash ISAs.

The LISA was opened during the HTB ISA transition that allowed the full amount (£16k) to be moved across and I've been adding £4k each year. I like that LISAs are their own account compared to HTB ISAs that reused the Cash ISA wrapper.

Money is still in the account for a house purchase but increasingly it feels like it might slip into been locked away until retirement. The house price limit should be index linked in law. The situation with prices hitting the limits however is a symptom of the housing market been chronically unfit for purpose. The mismatch between supply and demand has existed for far too long causing a huge deficit of homes. 

I feel that the withdrawal penalty is a little too harsh. It was relaxed during Covid-19 but now returned. I think the fact it needed to be relaxed showed it's a bad setup.

ISA arrangements in the UK need a re-simplification. Given the issues with LISAs, even when been used for house purchases I feel that they should be axed and the balance (including current bonus) absorbed into traditional cash / S&S products. It solves the redemption issue and it seems broadly fair. LISA users can still use them for their intended use but the flexibility will vastly reduce the numbers "caught out" through no fault of their own.

WillPS

The scheme itself is good but the implementation leaves a lot to be desired.

• There is no requirement for banks to track the base rate in any way - meaning most are offering rates 2-3% below the base rate. Essentially they can make that amount for themselves just by depositing the funds with the Bank of England!
• You are very limited after hitting the age of 40 in terms of transfer options - this needs to be stopped and (factoring in the previous point) it leads to unfortunate situations where people are stuck with their money earning very little.
• The £450k cap means the scheme is (currently) of limited use in London. I think it's right that there's a cap, but it should either be higher or there should be a facility for those buying for the first time but above the cap to at least get back their deposits minus the government bonus.
• Similarly it feels incredibly tough for people who fall on hard times to be effectively expected to withdraw their savings with a penalty and spend them before being eligible for income related benefits. This is another situation where a 'without government bonus' withdrawal needs to be made available.

CooperSF

I hold a Moneybox Cash Lifetime ISA (3.25% with a bonus 0.5% until 11/23) and I’ve just noticed that their website is advertising the exact same account but @ 4% (inc. bonus 0.75%).

Am I entitled to ask them to review my rate or is it a case of a special offer for new sign ups?

EssBiem

CooperSF said:

I hold a Moneybox Cash Lifetime ISA (3.25% with a bonus 0.5% until 11/23) and I’ve just noticed that their website is advertising the exact same account but @ 4% (inc. bonus 0.75%).

Am I entitled to ask them to review my rate or is it a case of a special offer for new sign ups?

I think you should have has a push notification to say your interest has increased to 4% now? That's what i got about 3 or 4 days ago.

edit: it might have been a popup when i signed into the account. I have almost the same timings as you with my moneybox account