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Transfer LISA to Help To Buy ISA

Spir4
Spir4 Posts: 88 Forumite
Seventh Anniversary 10 Posts
in ISAs & tax-free savings
Hi guys,

I'm guessing not, but just to be sure: can you transfer a LISA into a Help to Buy ISA?

Thanks!

Comments

  • eskbanker
    eskbanker Posts: 40,673 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    I'm not aware of anything specific prohibiting this, but it would be subject to doing so at no more than £200 per month, while suffering 25% withdrawal penalties, so it seems highly unlikely to be a useful exercise for anyone. Obviously the HTB ISA would already need to be open, given that the application deadline has passed....

    Assuming this isn't an entirely hypothetical question, what are the circumstances?
  • Spir4
    Spir4 Posts: 88 Forumite
    Seventh Anniversary 10 Posts
    Thanks yeah I was thinking that.
    It's not hypothetical at all. I've got a LISA which has about £1500 in it, and a HTB ISA which has about £3000 in it. I've decided not to continue with the LISA, but since I'd lose money if I take out the LISA I was hoping that maybe I could just transfer it to the HTB ISA, because with a HTB ISA there's no penalty of taking out money.
  • masonic
    masonic Posts: 29,598 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    There's no penalty if you wait until you're 60 before withdrawing it.
  • Spir4
    Spir4 Posts: 88 Forumite
    Seventh Anniversary 10 Posts
    I know but I think a LISA is not a good choice if you don't plan on using it to buy your first house since you can't make any deposits anymore after you turn 50. So the money is just standing there with a marginal interest, basically losing value due to inflation.
  • eskbanker
    eskbanker Posts: 40,673 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Spir4 wrote: »
    since I'd lose money if I take out the LISA I was hoping that maybe I could just transfer it to the HTB ISA, because with a HTB ISA there's no penalty of taking out money.
    Which is exactly why that loophole/workaround doesn't exist!

    https://www.gov.uk/guidance/lifetime-isas-for-isa-managers#transferring-lisas-between-lisa-managers:
    LISAs can also be transferred to other types of ISAs. These transfers:
    • are treated as a withdrawal from the LISA, and are subject to a 25% withdrawal charge, unless the transfer happens after the investor’s 60th birthday or the investor has declared that they have a terminal illness
    Spir4 wrote: »
    I know but I think a LISA is not a good choice if you don't plan on using it to buy your first house since you can't make any deposits anymore after you turn 50. So the money is just standing there with a marginal interest, basically losing value due to inflation.
    Which is why anyone using a LISA for retirement purposes would be best advised to use a S&S one rather than a cash one....
  • Spir4
    Spir4 Posts: 88 Forumite
    Seventh Anniversary 10 Posts
    What does S&S stand for? Googled it but doesn't give me any results...
  • eskbanker
    eskbanker Posts: 40,673 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Spir4 wrote: »
    What does S&S stand for? Googled it but doesn't give me any results...
    Stocks and shares, as per https://www.moneysavingexpert.com/savings/lifetime-isas/#pension-3:
    The longer you're likely to keep the LISA, the more you should consider share-type investments

    The LISA gives you two savings options. The main one for first-time buyers will be cash LISAs which is where you put the money into the equivalent of a savings account, so your capital (the sum you put in) is safe and you get a defined amount of interest on top.

    Yet if you're saving for retirement it's also worth considering investment LISAs – where the money is invested in stocks and shares (or funds) and performance depends on how well your investments do. Here you're taking a risk that you may lose some cash in the hope that it will grow faster.
  • Spir4
    Spir4 Posts: 88 Forumite
    Seventh Anniversary 10 Posts
    Thanks eskbanker and everyone else!
This discussion has been closed.
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