Should I stop paying into my LISA?

YoungInLondon

I’ve been paying into my LISA for over three years, and for the past two I have been maxing it out for the year to receive the maximum bonus. But my chance of buying a property is still a couple of years away, and I’d be looking to buy most likely in Brighton which is not cheap. I’ve been hoping that the £450,000 cap will be increased with the pressure that Martin has been putting on the gov to address this, but the longer I’m waiting the less I’m sure it will change. Should I stop paying in to the LISA to cut my losses? Or do I keep paying in and hope that the cap is addressed?

Mark_d

Each year I would put £4k into a Stocks & Shares LISA and £16k in to a regular Stocks & Shares ISA.  It would take a good few years until I could buy a place in somewhere expensive like Brighton.  Even if I can't access the LISA funds until age 60, I would have availed of the £1000 government contribution each year.  And fingers crossed it should have generated a significant return.

masonic

I don't think it is likely that the cap will be changed in the foreseeable future. I think it is slightly more likely that the penalty will be reduced to 20% in circumstances like this so that the buyer is not penalised overall.

YoungInLondon

Thanks Mark D - I don’t earn enough yet to save much more than £7000 a year and I worry that if I continue to put funds in my LISA and then have to wait until I’m 60 to withdraw then I’ll have to start saving to buy all over again. Perhaps I should stop paying into it and redirect my monthly savings to a different ISA. 

Thanks Masonic for the insight - let’s hope that’s the least they do.