New LISA for Retirement question

paultje_007

Hi,

Reading up on the new LISA Rules also for Retirement purposes (not first time buyer purposes) has me questioning something that isn't explained.

Me and my partner both had set up a Lifetime Isa 5 years ago when they offered the first time buyer LISA with the £1000 on top bonus. We did that for 4 years and used it both to add the money to the pot to buy our first property.

We still have the accounts of the LISA with our provider, with no money in it anymore. (provider has also changed now to JPMorgan through a takeover, but our accounts are still there).

Can we just continue with this LISA and have the bonus again or because it has already served its purpose 5 years ago as First time buyer purpose, we need to open a new LISA for Retirement purposes with a (new) provider to be able to get the bonus?

Especially this is important for me, as my old LISA account was setup before my 40th, so if I can't continue and need a new one I'm now over 40 and unable to due to age limit.

Please help.

Thanks

Glad

As I understand it, if the LISA is still open, you should be able to carry on paying into it and receiving the 25% government bonus until you're 50. Using it for your first home doesn't mean it's "used up" and can't then be used for retirement.

The important thing is whether the account is genuinely still open. If it was closed after your house purchase, you may have a problem because you're now over 40 and generally can't open a brand new LISA, although there are limited exceptions for transfers of existing LISAs.

Someone with better knowledge of the LISA rules will hopefully be along soon, but I think the key question is simply whether your original LISA remained open after the house purchase.

se2020

During my ftb conveyancing I had to fill in a form for the solicitor with the details of the Lisa and one of the questions was 'did I want the account left open or closed'

I responded, 'left open' and the solicitor said she would leave a balance of £1 in it to make sure it stayed open.

If it looks like the account is still open the easiest thing to do would just be to try and transfer a small amount in and see if it is accepted.

You could try the full £4k but it might 'go missing' for a while before getting returned if the account is closed.

As mentioned, you can't pay in when you are over 50 and, at that point the money effectively becomes locked away for the next 10 years.

You should run the numbers and see if a Lisa is actually the best choice for retirement savings especially if you are nearing 50.

paultje_007

The account is confirmed still open. So like Glad mentioned I can continue with this new "saving" scheme with the gov bonus.

But, this old provider and the LISA I got isn't the most efficient anymore. I'd rather change provider, but I guess to change provider I need to open an account first before I can transfer from the old to the new, but would that new account then be seen as one opened after 40 and therefore disclosed from the bonus rule?

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82083501#Comment_82083501

This has been discussed before. In theory you should be able to transfer when you are over 40, but not every provider will allow it. So you would need to speak to them first.

Reading up on the new LISA Rules 

There is apparently some discussion in the Govt about changing the rules, but AFAIK the current rules have not changed.

se2020

Last time I looked there were about half a dozen providers accepting transfers from over 40's.

Best rate was about 4%.

The number of providers has dropped and I would expect it (and the rates) to drop even further when the new Lisa replacement is launched.

Hence my comment above about doing the maths to make sure a Lisa is the best option as you could find the funds locked into the product with very little option to move them over 10yrs from 50-60.