Lifetime ISA

potentialhousebuyer

I have been reading the MSE guide and some other websites as I want to set a lifetime ISA up. 

Am I right in saying they are exactly the same apart from each provider has different interest rates? 

They are all regulated and give you the protection up to 85k? 

Alexland

There are Cash Lifetime ISAs generally intended for first time buyers intending to make qualifying property purchases and there are S&S Lifetime ISAs generally intended for investing until age 60. From your username my guess is you are a potential first time buyer.

Cash Lifetime ISAs will be FSCS protected to £85k your money is safe and will grow with the interest rate.

On the S&S Lifetime ISAs the provider will have FSCS protection but depending on the investment you/they choose it may have partial or no FSCS protection.

Read up on the product carefully as if you do not make a qualifying property purchase the withdrawal before age 60 penalty is slightly greater than the bonus. Eg add £4k, get £1k 25% bonus, pay £1250 25% penalty so overall loss £250 of £4k = 6.25%.

Mark_d

potentialhousebuyer said:

Am I right in saying they are exactly the same apart from each provider has different interest rates? 

They are all regulated and give you the protection up to 85k? 

I have an Lifetime ISA (Stocks & Shares) with AJ Bell.  It operates just like the regular S&S ISA.  Your rate of return depends entirely on your investments.  You don't get FSCS protection except on any uninvested cash.

Alexland

Mark_d said:

I have an Lifetime ISA (Stocks & Shares) with AJ Bell.  It operates just like the regular S&S ISA.  Your rate of return depends entirely on your investments.  You don't get FSCS protection except on any uninvested cash.

You also get protection if the platform somehow lost your assets eg get hacked or internal fraud (and the scale was such they are unable to compensate you from their own reserves or business insurance) and if you invested in an OEIC fund (which I don't as an ETF gives me capped LISA fees) you would get protection against the fund manager getting into similar difficulties.