LISA after using Help2Buy ISA

RoeJainer

So a couple of years ago my partner and I used our Help2Buy ISA for our first home and got the 25% govt bonus which was great.

I’ve seen there is a similar scheme for the Lifetime ISA which you can save towards your first home or pension, but not both. 

So the question is can I get a LISA and still claim the pension bonus or have we lost the chance at that because we used the Help 2 Buy ISA bonus?

33 years old and so fine age wise to get a LISA but can’t see the benefit of it without the bonus.

Thanks for any advice

DietIrnBru

Short answer - yes you can use a LISA and receive the 25% uplift as part of your retirement savings.

There are many threads on here looking at the LISA as a retirement tool - also a lot online with pensions versus LISA. 

I would say given the timescales involved - you may get better returns from an Investment LISA versus a cash savings given inflation. Dodl offer cheap managements fees if you like your investments to come with minimal decision making and input - however, some folk do like to actively manage their portfolios, in which case the likes of AJ Bell and Hargreaves offer this.

I'd also advise you to remain within your workplace pension - particularly if you are a higher rate tax payer. As I said LISA can compliment but it shouldn't replace.

MX5huggy

It’s not that you can only use a LISA for 1st property or retirement saving. You can do both, but for you you have now purchased a property so could not use a LISA to buy a property so the only penalty free way for you to withdraw money from the LISA is to wait till you are 60. 

Unlike the H2B ISA with a LISA you don’t “claim” the bonus is is automatically added to the account after you make a deposit. This bonus is 25% the penalty for withdrawing is also 25% but of the total after the bonus so you lose 6.15%. 

RoeJainer

Ok that’s nice, thanks for the tips. Most of the articles say use a LISA for your first home or pension, maybe they should say and/or if you can do both.

Good advice, I am planning it as a supplement to workplace pension adjusting the levels depending on how lucrative or not the pension scheme at work is. Thanks both