LISA - when can I use my savings, penalty free

jamesbryce

My daughter has a Moneybox LISA which she opened in early 2022 and has regularly saved the maximum £4,000 each financial year since and currently has £15,000 (£12,000 plus the government 25% bonus) saved.

Am I correct to assume that if she were to deposit a further £4,000 into her LISA on, or after, the 6th April 2024 the full amount (i.e. £16,000 plus the government 25% bonus) of £20,000 would be available to be used as part of a deposit for her 1st home on or after 7th May 2024.

She is keen to maximise all her saving for purchasing her first home and so the extra £1000 pounds she would gain by using her LISA allowance for 2024/25 would help.

eskbanker

jamesbryce said:

Am I correct to assume that if she were to deposit a further £4,000 into her LISA on, or after, the 6th April 2024 the full amount (i.e. £16,000 plus the government 25% bonus) of £20,000 would be available to be used as part of a deposit for her 1st home on or after 7th May 2024.

LISA bonuses operate within monthly claim periods, so if she pays in between 6 April and 5 May, the ISA manager submits the bonus claim within 14 days of the end of that period, and then the payment of the bonus is within another 14 days, so that could stretch into early June.  It is possible to make multiple withdrawals for a first property though, what are her likely purchase timescales?

jamesbryce

She is unlikely to be in a position to purchase a house until June/July at the earliest so it looks like she might be able enjoy another £1000 of free money to add to her deposit. Thanks for your help.

polar_opposite

On Moneybox's FAQs they say the following:

What if I’m due to complete on a first home purchase soon?

If you’re due to complete on a property purchase after your bonus is due to be paid, we should still be able to withdraw this bonus and send the funds to your solicitor.

Please note that once your bonus is paid out by HMRC and is available to withdraw, it can take up to 3 working days for our Cash LISA, or up to 10 working days for our S&S LISA for the withdrawal to complete.

If your completion date is before the bonus is due to be paid, you can still withdraw the bonus once it is paid out, however the 25% government penalty would apply and the funds would be paid out to your DD linked bank account, rather than to your solicitor.

Zoe02

She should remember that the solicitor withdraw the funds not her personally when buying the property.