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

eskbanker

There is one anonymised reference in one of those articles to "Insiders at banks and building societies say they are afraid of being dragged into a mis-selling scandal" but the attributed quotes are all from industry 'experts' and there doesn't appear to be anything in the Telegraph text that actually matches the headline!

alco_pop

someone said:

EssBiem said:

My hunch however is once i hit 40 and can no longer switch provider my money will languish for 20 years on an interest rate that gets less and less competitive, that's where the worry lays.

If your using it for retirement you should be using the S&S version of LISAs, the cash version is not really suitable. This was the crux of why banks had been somewhat shy of LISAs and so few LISA products been on the market. Banks feared they would be liable for mis-selling down the road.

I went with the Cash ISA, At the time they were quite new and I didn't really have the time to look into them that closely to judge the risk that would be with S&S version, rather than Cash. I had planned to just get one opened before 40 and then to look in to it more closely afterwards before deciding which S&S to go with. But it looks like there are limited options for moving the CASH LISA to other providers, and no option to move to a S&S one. If you are under 40 I think you can just open a new one under the different type. But over 40, it seems you are a bit stuffed.

One thing I hadn't realised was that you can have a Cash ISA, a S&S ISA as well as a LISA, I had just assumed that what ever type of LISA you had would use that one up, so you could have a CASH LISA and a S&S ISA, but not also a CASH ISA.  

masonic

alco_pop said:

someone said:

EssBiem said:

My hunch however is once i hit 40 and can no longer switch provider my money will languish for 20 years on an interest rate that gets less and less competitive, that's where the worry lays.

If your using it for retirement you should be using the S&S version of LISAs, the cash version is not really suitable. This was the crux of why banks had been somewhat shy of LISAs and so few LISA products been on the market. Banks feared they would be liable for mis-selling down the road.

I went with the Cash ISA, At the time they were quite new and I didn't really have the time to look into them that closely to judge the risk that would be with S&S version, rather than Cash. I had planned to just get one opened before 40 and then to look in to it more closely afterwards before deciding which S&S to go with. But it looks like there are limited options for moving the CASH LISA to other providers, and no option to move to a S&S one. If you are under 40 I think you can just open a new one under the different type. But over 40, it seems you are a bit stuffed.

There are now options, AJ Bell via both of its brands Youinvest and Dodl, will accept transfers from over 40s. These tend to be competitive on fees, with Youinvest being better for larger accounts.

intalex

masonic said:

There are now options, AJ Bell via both of its brands Youinvest and Dodl, will accept transfers from over 40s. These tend to be competitive on fees, with Youinvest being better for larger accounts.

I had tried with AJ Bell directly (Youinvest?) in April but it didn’t work then on the online form (due to being over 40) so ended up transferring in my Nude Cash LISA to Dodl, which for anyone interested, was finally completed after serving the (contentious) 95-day notice.

snowqueen555

The interest rates are lousy right now. Bath BS has the highest rate at 3.74% but they don't allow transfers in. Despite the rising in interest rates the providers have chosen to not pass any savings onto us. Moneybox's 3.25% has been in place for a year or something now and I am stuck with them as no better rate.

masonic

snowqueen555 said:

The interest rates are lousy right now. Bath BS has the highest rate at 3.74% but they don't allow transfers in. Despite the rising in interest rates the providers have chosen to not pass any savings onto us. Moneybox's 3.25% has been in place for a year or something now and I am stuck with them as no better rate.

Nude offers 3.8%, although it has a £2 monthly membership fee that makes it less attractive for smaller balances. You'd expect rates to be a little behind easy access ISA rates (currently up to 4.5%), but due to lack of competition in this rather small LISA market rates have trailed rather more than might have been anticipated.

snowqueen555

masonic said:

snowqueen555 said:

The interest rates are lousy right now. Bath BS has the highest rate at 3.74% but they don't allow transfers in. Despite the rising in interest rates the providers have chosen to not pass any savings onto us. Moneybox's 3.25% has been in place for a year or something now and I am stuck with them as no better rate.

Nude offers 3.8%, although it has a £2 monthly membership fee that makes it less attractive for smaller balances. You'd expect rates to be a little behind easy access ISA rates (currently up to 4.5%), but due to lack of competition in this rather small LISA market rates have trailed rather more than might have been anticipated.

If you do the calculations it is reaching the point where it isn't worth contributing anymore. The £1000 extra per year in the LISA is becoming negated by the lower interest rate. I'm getting 4.8% in a standard account which equals an extra £600 per year than in the Lisa for the same amount of money. You're essentially getting £400 extra per year for the benefit of having it locked up and with restrictions. 

masonic

snowqueen555 said:

masonic said:

snowqueen555 said:

The interest rates are lousy right now. Bath BS has the highest rate at 3.74% but they don't allow transfers in. Despite the rising in interest rates the providers have chosen to not pass any savings onto us. Moneybox's 3.25% has been in place for a year or something now and I am stuck with them as no better rate.

Nude offers 3.8%, although it has a £2 monthly membership fee that makes it less attractive for smaller balances. You'd expect rates to be a little behind easy access ISA rates (currently up to 4.5%), but due to lack of competition in this rather small LISA market rates have trailed rather more than might have been anticipated.

If you do the calculations it is reaching the point where it isn't worth contributing anymore. The £1000 extra per year in the LISA is becoming negated by the lower interest rate. I'm getting 4.8% in a standard account which equals an extra £600 per year than in the Lisa for the same amount of money. You're essentially getting £400 extra per year for the benefit of having it locked up and with restrictions. 

An extra £600 per year from an interest rate difference of 1.55% implies a LISA balance in excess of £38k. If you have additional non-ISA savings as well, then you are probably nearing the point where you could use the LISA towards a first property, and it is generally advantageous to do so at the earliest opportunity. Over the period you accumulated that sum, you are likely better off to the tune of something north of £5k for using the LISA. There will come a point, however, where long term use of a cash LISA is detrimental.

For those who are using a LISA for retirement, a S&S LISA would be the vehicle of choice, and the good news is the charges on S&S LISAs are competitive with charges on S&S ISAs and SIPPs.

snowqueen555

masonic said:

snowqueen555 said:

masonic said:

snowqueen555 said:

The interest rates are lousy right now. Bath BS has the highest rate at 3.74% but they don't allow transfers in. Despite the rising in interest rates the providers have chosen to not pass any savings onto us. Moneybox's 3.25% has been in place for a year or something now and I am stuck with them as no better rate.

Nude offers 3.8%, although it has a £2 monthly membership fee that makes it less attractive for smaller balances. You'd expect rates to be a little behind easy access ISA rates (currently up to 4.5%), but due to lack of competition in this rather small LISA market rates have trailed rather more than might have been anticipated.

If you do the calculations it is reaching the point where it isn't worth contributing anymore. The £1000 extra per year in the LISA is becoming negated by the lower interest rate. I'm getting 4.8% in a standard account which equals an extra £600 per year than in the Lisa for the same amount of money. You're essentially getting £400 extra per year for the benefit of having it locked up and with restrictions. 

An extra £600 per year from an interest rate difference of 1.55% implies a LISA balance in excess of £38k. If you have additional non-ISA savings as well, then you are probably nearing the point where you could use the LISA towards a first property, and it is generally advantageous to do so at the earliest opportunity. Over the period you accumulated that sum, you are likely better off to the tune of something north of £5k for using the LISA. There will come a point, however, where long term use of a cash LISA is detrimental.

For those who are using a LISA for retirement, a S&S LISA would be the vehicle of choice, and the good news is the charges on S&S LISAs are competitive with charges on S&S ISAs and SIPPs.

Yup you are right. I can't afford anything, which shows you how long I've been saving up for.

masonic

snowqueen555 said:

masonic said:

snowqueen555 said:

masonic said:

snowqueen555 said:

The interest rates are lousy right now. Bath BS has the highest rate at 3.74% but they don't allow transfers in. Despite the rising in interest rates the providers have chosen to not pass any savings onto us. Moneybox's 3.25% has been in place for a year or something now and I am stuck with them as no better rate.

Nude offers 3.8%, although it has a £2 monthly membership fee that makes it less attractive for smaller balances. You'd expect rates to be a little behind easy access ISA rates (currently up to 4.5%), but due to lack of competition in this rather small LISA market rates have trailed rather more than might have been anticipated.

If you do the calculations it is reaching the point where it isn't worth contributing anymore. The £1000 extra per year in the LISA is becoming negated by the lower interest rate. I'm getting 4.8% in a standard account which equals an extra £600 per year than in the Lisa for the same amount of money. You're essentially getting £400 extra per year for the benefit of having it locked up and with restrictions. 

An extra £600 per year from an interest rate difference of 1.55% implies a LISA balance in excess of £38k. If you have additional non-ISA savings as well, then you are probably nearing the point where you could use the LISA towards a first property, and it is generally advantageous to do so at the earliest opportunity. Over the period you accumulated that sum, you are likely better off to the tune of something north of £5k for using the LISA. There will come a point, however, where long term use of a cash LISA is detrimental.

For those who are using a LISA for retirement, a S&S LISA would be the vehicle of choice, and the good news is the charges on S&S LISAs are competitive with charges on S&S ISAs and SIPPs.

Yup you are right. I can't afford anything, which shows you how long I've been saving up for.

Then you are probably also at risk of breaching the £450k maximum property value when you are finally in a position to buy.