What happens LISA between 50 & 60 ?

Baz11

My daughter has a managed Stocks & Shares ISA. If she starts a cash LISA can she transfer it at 50 into a S&S LISA to the same fund manager who don't handle cash LISA's? Thank you.

eskbanker

Baz11 said:

My daughter has a managed Stocks & Shares ISA. If she starts a cash LISA can she transfer it at 50 into a S&S LISA to the same fund manager who don't handle cash LISA's? Thank you.

Many LISA providers don't allow accounts to be opened after 40, even for transfers, although the scheme rules permit this.  What is she trying to achieve, i.e. why would she use a cash LISA if envisaging the money being used only in the long term?

Baz11

The cash LISA opened before age 40 attracts 25% bonus till age 50. Using it as a pension fund. Between 50-60 what interest rates apply & can it convert to Stocks & Shares with another institution?
Thank you 

jimjames

Baz11 said:

The cash LISA opened before age 40 attracts 25% bonus till age 50. Using it as a pension fund. Between 50-60 what interest rates apply & can it convert to Stocks & Shares with another institution?
Thank you 

The 25% bonus applies to a LISA regardless of whether it is cash or S&S so if intended for retirement then best to be in S&S from the start. 

eskbanker

Baz11 said:

The cash LISA opened before age 40 attracts 25% bonus till age 50. Using it as a pension fund. Between 50-60 what interest rates apply & can it convert to Stocks & Shares with another institution?

Just to be clear, the 25% bonus is added once for each deposit made up to 50, and is separate from the interest earned on cash LISAs or growth/dividends in S&S ones, which will apply whenever the account is held, i.e. both before and after 50.  As above, S&S is the obvious route (from the start) for retirement money....

Baz11

Thank you for that clarification. So from 50 to 60 the funds are identical to an S&S ISA except their locked in if you remove any of it there's penalties.!

eskbanker

Baz11 said:

Thank you for that clarification. So from 50 to 60 the funds are identical to an S&S ISA except their locked in if you remove any of it there's penalties.!

Not sure exactly what you mean by 'the funds are identical to an S&S ISA' but yes, the principle of any type of LISA is that, in return for the 25% bonus, withdrawal penalties apply for any access before 60 other than for a first time property purchase.

Baz11

What I meant was an S&S LISA after age 50 ( bonus ceases)mirrors an S&S ISA except for conditions  regarding  withdrawals.

Alexland

Baz11 said:

What I meant was an S&S LISA after age 50 ( bonus ceases)mirrors an S&S ISA except for conditions  regarding  withdrawals.

It's probably simpler to think of it as continuing to be a LISA that you can no longer contribute into.
Now at 60 it will hopefully be possible to ask a S&S ISA manager to transfer in the LISA assets without penalty as account consolidation would likely be more cost efficient depending on platform fee structures at the time.

masonic

Baz11 said:

What I meant was an S&S LISA after age 50 ( bonus ceases)mirrors an S&S ISA except for conditions  regarding  withdrawals.

It is your ability to make further contributions that ceases. The bonus is only ever earned on new contributions, so you won't get a bonus in any year you do not pay new money into it. That is true before the age of 50 too.