Stocks & Shares Lifetime ISA transfers - no good options?

ircE

Last year I decided to stop topping up my pension and instead put the money into a S&S LISA, the logic being that I could still use the money as a pension, but I could also/instead use some (or all) of it to buy a house. I would like to buy a house at some point but still have no concrete plans for the next few years at least. I found the "no fees for 12 months" link for Nutmeg's LISA last year via MSE and figured it seems as good a place to start as any. I now have about £1,100 invested with them so far and plug in about £100 every month. My 12 months are coming to a close so I thought it's time to start looking elsewhere to see if I can save on fees (I also want to leave them for other reasons).

Deary me...

Out of the dozen or so LISA providers I've found, a few are exclusive in their clientele, a few don't take transfers in and the rest appear to have even higher (1%+ pa) or opaque pricing structures. I'm having a tough time determining what's most cost-effective. So far I've narrowed my choice down to EQi, AJ Bell and Unity Mutual.

EQi seem to have the lowest annual cost (0.2%) and no fees for buying funds, which is what I think I will be buying. However, I can't seem to find much information/reviews about them outside of their website. Is there a reason not even MSE mentions them despite their apparent appeal?

AJ Bell is mentioned on MSE's LISA page. Their 0.25% is competitive but their £1.50 fee for fund dealing seems to mean I'll be paying £1.50 for my monthly investments. That would make my annual costs 0.25% + £18 by my calculation, which brings up the fees % quite a lot...

Unity Mutual is by far the most peculiar of the lot. It does not seem to have fees at all and offers a guaranteed interest rate every year, announced in advance. I'd love to support a mutual, but there are some suspicious comments about them on these forums, and I don't know how the interest rate will compare to conventional investment returns over the long run.

So, what do you all think? Any views, experiences, suggestions?

Albermarle

I am not sure why Eqi LISA is rarely mentioned. Unity Mutual appears to be a cash LISA.

AJ Bell have a low cost subsidiary that allows S&S LISA transfers. However unlike Nutmeg there is a platform fee,  and the investment fund fee. However it should still be cheaper overall.
Dodl by AJ Bell - Investing needn’t be scary

ircE

Albermarle said:

I am not sure why Eqi LISA is rarely mentioned. Unity Mutual appears to be a cash LISA.

AJ Bell have a low cost subsidiary that allows S&S LISA transfers. However unlike Nutmeg there is a platform fee,  and the investment fund fee. However it should still be cheaper overall.
Dodl by AJ Bell - Investing needn’t be scary

Unity Mutual is indeed a Stocks & Shares LISA, despite having the characteristics of a cash account. Thus the peculiarity.

Yes, I'd come across Dodl. The £12pa fee would make the annual fees >1%, the headline 0.15% is misleading for smaller investors such as myself.

I think I'll opt for the Unity Mutual for now - even if it doesn't work out I can just transfer again later on. There's worse things than 3% guaranteed returns for no fee.

masonic

You can rule out EQi right away. They are in wind down, having transferred everything they could to Interactive Investor, they had to retain existing LISA customers as nobody would take them, but they are closed to new business.

We discussed the Unity Mutual product when it first came out, see https://forums.moneysavingexpert.com/discussion/5920966/unity-mutual-launches-new-type-of-lifetime-isa-mse-news#post75019176

It's a life insurance underlying product. Based on the current risk-free rate, there are underlying charges (not unusual for these to be around 1.5-2%) hidden away in the financial instrument. You'd be better off making annual investments into an AJ Bell LISA using a money market fund, where you could earn north of 4.5% relatively risk free.

While considering cash and cash-like, the Moneybox cash LISA has no fees and a rate above Unity Mutual, even after the promotional bonus falls away.

ircE

masonic said:

You can rule out EQi right away. They are in wind down, having transferred everything they could to Interactive Investor, they had to retain existing LISA customers as nobody would take them, but they are closed to new business.

We discussed the Unity Mutual product when it first came out, see https://forums.moneysavingexpert.com/discussion/5920966/unity-mutual-launches-new-type-of-lifetime-isa-mse-news#post75019176

It's a life insurance underlying product. Based on the current risk-free rate, there are underlying charges (not unusual for these to be around 1.5-2%) hidden away in the financial instrument. You'd be better off making annual investments into an AJ Bell LISA using a money market fund, where you could earn north of 4.5% relatively risk free.

While considering cash and cash-like, the Moneybox cash LISA has no fees and a rate above Unity Mutual, even after the promotional bonus falls away.

Thank you for the heads up on both EQi and Unity Mutual!

I'm hesitant about AJ Bell for the aforementioned reason of £1.50 per fund purchase, meaning £18 pa fees in addition to the 0.25% annual management fee. I suspect this includes their MMFs. What I might do is set aside my monthly sums into a savings account outside the LISA and then pay it all into the LISA once per year so I only pay the £1.50 once.

masonic

ircE said:

masonic said:

You can rule out EQi right away. They are in wind down, having transferred everything they could to Interactive Investor, they had to retain existing LISA customers as nobody would take them, but they are closed to new business.

We discussed the Unity Mutual product when it first came out, see https://forums.moneysavingexpert.com/discussion/5920966/unity-mutual-launches-new-type-of-lifetime-isa-mse-news#post75019176

It's a life insurance underlying product. Based on the current risk-free rate, there are underlying charges (not unusual for these to be around 1.5-2%) hidden away in the financial instrument. You'd be better off making annual investments into an AJ Bell LISA using a money market fund, where you could earn north of 4.5% relatively risk free.

While considering cash and cash-like, the Moneybox cash LISA has no fees and a rate above Unity Mutual, even after the promotional bonus falls away.

Thank you for the heads up on both EQi and Unity Mutual!

I'm hesitant about AJ Bell for the aforementioned reason of £1.50 per fund purchase, meaning £18 pa fees in addition to the 0.25% annual management fee. I suspect this includes their MMFs. What I might do is set aside my monthly sums into a savings account outside the LISA and then pay it all into the LISA once per year so I only pay the £1.50 once.

That's exactly what I'd suggest. There are regular saver accounts paying >5% that can be utilised to save your annual contribution over the course of the year.

If you were able to save £1000 per year and had to pay £1.50 to invest that, then say your investment horizon at the time of investment was 15 years, if you spread that cost, it only adds 0.1% onto the annual fees.