LISAs - anything else I should know?

I'm 32, basic rate tax payer and enrolled into WP (5%-3%). I'm on track to clear debt by Christmas '25. I've started to dip my toes into S&S investing with a Trading212 S&S ISA, which is more to start to understand investing than for any real purpose.

Having been thinking for a few months now, and with some great advice on here, I believe a LISA will be the most appropriate product for me to put some more money away for the future. It gives me the opportunity to build a house deposit (I'd be a FTB), or should life not take me that way, to build a secondary retirement fund that I could access earlier then normal pension age. There's the 25% state bonus which is actually a higher amount than my employer WP contribution. I can pay in until 50. I can access at 60 or for first property purchase, and any withdrawals outside of these conditions will incur a 25% penalty. This would be money I'd put away and 'forget about' for a while. 

If I understand correctly, they're tax free on the way in and on the way out - the money I use to deposit into one has had basic rate tax and NI already applied. It's then tax free upon legitimate use, right? If so, a nice thought there. 

I'm just wondering if there's anything else I'm missing? Need to know? Considering I'm more likely to want to use it for retirement, would S&S be more suitable? Or should I play it safer with a Cash LISA and hope that in around 5 years I might be in a position to put down a deposit and pay a mortgage? Should I start with a Cash LISA and see if homeownership will be a thing for me, and if not could I transfer it to a S&S one?
Debt @ LBM 01/11/24 - £14,161.59
Debt current - £10,845.80

"When it's good, it's fun. When it's bad, it's funny". Trying to take things one step at a time.

Comments

  • sammy_zammy
    sammy_zammy Posts: 91 Forumite
    10 Posts First Anniversary
    Nothing you’re missing. It’s just a savings account with specific conditions on how you can withdraw it.
  • masonic
    masonic Posts: 26,811 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    While there remains a reasonable chance of you using it towards a first time property purchase, it would be sensible to stick to a cash LISA, unless you believe it will be many years before you can afford to buy.
  • BrotherUuurgh
    BrotherUuurgh Posts: 124 Forumite
    100 Posts Name Dropper
    Thank you. I've gone with my gut and am in the process of opening a Cash LISA with Moneybox. I won't be able to max the contributions until debt free, but figured I might as well start now as I do have a little left over each month. 
    Debt @ LBM 01/11/24 - £14,161.59
    Debt current - £10,845.80

    "When it's good, it's fun. When it's bad, it's funny". Trying to take things one step at a time.

  • BrotherUuurgh
    BrotherUuurgh Posts: 124 Forumite
    100 Posts Name Dropper
    Just a brief one - is it normal for Moneybox to ask for ID over email? I've replied to their email asking if there's a secure portal on the app or something, but I want to be sure before I send my actual ID in an unsecure way. 
    Debt @ LBM 01/11/24 - £14,161.59
    Debt current - £10,845.80

    "When it's good, it's fun. When it's bad, it's funny". Trying to take things one step at a time.

  • masonic
    masonic Posts: 26,811 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Just a brief one - is it normal for Moneybox to ask for ID over email? I've replied to their email asking if there's a secure portal on the app or something, but I want to be sure before I send my actual ID in an unsecure way. 
    They do have something set up for this IIRC. Fallback would be to send as an encrypted zip and provide the password via secure message or over the phone.
  • BrotherUuurgh
    BrotherUuurgh Posts: 124 Forumite
    100 Posts Name Dropper
    In the end though it was brief, I just wasn't comfortable with the means to provide ID. Instead I've closed that application and have opened one with HL. 
    Debt @ LBM 01/11/24 - £14,161.59
    Debt current - £10,845.80

    "When it's good, it's fun. When it's bad, it's funny". Trying to take things one step at a time.

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