Lifetime ISAs guide

The tax year ends on 5th of April so if your bonuses are due towards the end of April that could mean you have a very low contribution this tax year. Is it worth doing some low cost financial engineering to get some more money in this tax year?

If you want to continue investing your LISA in the markets (presumably because you are not planning to buy property for a long time, you like taking risks or are now planning to use it for retirement) then why not open a LISA with HL and transfer both your Nutmeg LISA and HTB ISA in? As part of the transfer both providers will tell HL the amount contributed this year (it doesn't really matter if Halifax get the HTB interest wrong) so HL will then be able to tell you how much more you can contribute. The HL customer service is excellent and the fees similar to Nutmeg.

The downsides to HL are choosing a fund (Vanguard LifeStrategy series is similar to Nutmeg fixed portfolios), keeping track of the cash balance to pay platform fees and the exit fee at the end - if the FCA still allow them to charge it. The upside to HL is that if the value gets really big you can cap your platform charges by investing in ETFs.

Alex.

My daughter and future son in law each opened an H2B in the 2016-17 tax year. They then each opened a LISA with Skipton after 5th April, transferred their H2Bs (£1200 value) into their LISAs and have been continuing to save further.

Have I understood things correctly - that the H2B money does not count towards the £4,000 annual LISA limit? Will they get the government bonus on that as well?

They are intending leaving it all there for another year and buying in 2019.

Thanks!

Thank you - so does this mean that they could potentially earn the 25% government bonus on BOTH the 2016/7 H2B £1200 transferred in 2017/8 AND £4000 saved by DD in 2017/8 before 5/4/18, ie on a total of £5200, so £1300?

Just wanted to share my experience of the Help to Buy ISA transfer I did from Halifax to Hargreaves Lansdown LISA.

1) The whole process took 8 working days from when I posted the form on the 27th Dec 17. Timeline: 27/12/17 – form posted; 03/01/18 – HTB ISA closed; 05/01/18 HTB ISA transferred (Hargreaves refer to this as the trade date); 09/01/18 HTB ISA transfer complete (Hargreaves refer to this as the settle date).

2) Halifax have now closed my Help to Buy ISA. I have not specifically asked for them to close it, however it seems they close it automatically when the transfer is made, I requested a full balance transfer on the Hargreaves form. This is contrary to some in this forum who have done a partial transfer to Skipton and managed to keep their HTB ISA open. There is no section on the Hargreaves transfer form which states the transfer in account should be closed.

3) Interest accrued after 5th April 17 does not contribute towards the 2017/2018 £4,000 LISA allowance.

4) Gross Interest accrued from yearly payment date (in my case 1st Dec 17) and 1 day before account closure date (3rd Jan 17) is paid with the balance transfer.

Using the above as a proxy, if I had transferred my HTB ISA later on the 1st March 18 I would have earned an extra £11.71 of interest. Not the biggest of deals but every little helps. In any case I wanted to get the transfer instigated early so there were no issues.

I am keeping my transfer in cash within the Hargreaves LISA. I plan to buy this year so not worried that they pay no interest on the funds.