Lifetime ISAs guide
Options
Comments
-
Hi all,
My apology if this question has been asked before. I just opened my LISA account with moneybox and was approved today. My question is if there is any way that i can check my account balance with HMRC? I know we can know we can check on Mondaybox app but apart from that it could be nice that i can see the balance through HMRC account.
Thank you and have a nice weekend0 -
To the best of my knowledge that question has never been asked before! I can't think of any reason someone would hope to use HMRC to check a balance on any account, but to desire to do so when using an app-based product seems even more counter-intuitive.My apology if this question has been asked before. I just opened my LISA account with moneybox and was approved today. My question is if there is any way that i can check my account balance with HMRC? I know we can know we can check on Mondaybox app but apart from that it could be nice that i can see the balance through HMRC account.
So, the short answer is no - HMRC isn't provided with any data about savings accounts other than that which is relevant to tax calculations, which obviously excludes tax-free ISAs, and in any case would only be supplied to HMRC annually.0 -
Hi all - I’ve lurked on this forum for ages and this is the first time I’ve wanted to ask something that hasn’t (as far as I’m aware) already been answered. Maybe that means it’s a really silly question, but here goes!
I’ve satisfied myself that a cash LISA is the right product for me, and Moneybox is obviously the best payer at the moment. But there is something troubling me about a product that is relatively unknown and entirely app-based. Even though it all seems above board and protected through the FSCS, is it really 100% safe? If something goes wrong, how would I prove I have money in the account if I have no paperwork - not even an annual statement? I feel as though I’d be sending my £4K off into the ether!
Apologies if it is indeed a silly question. I do want to be savvy and get the best product, but it took me a long tome to save £4K and I don’t want to be worrying about it!0 -
This might be a dumb question, is the yearly 1k bonus applicable in every year (e.g 2019, 2020,...) or is it for each calendar year?
In other words, which one is correct?
A) I open a Lifetime ISA this December and pay in 4k, I get 1k bonus for year 2019, then I can pay another 4k in January to get the max bonus for 2020
I open a Lifetime ISA this December and pay in 4k, I get 1k bonus, but this maxes out the bonus and I have to wait 365 days to get another 1k on my next 4k saving 0 -
Neither, like all ISAs, the Lifetime ISA is aligned with the tax year, which runs from 6th April - 5th April. You can pay in £4k on 5th April and another £4k on 6th April should you wish and be able to do so.This might be a dumb question, is the yearly 1k bonus applicable in every year (e.g 2019, 2020,...) or is it for each calendar year?
In other words, which one is correct?
A) I open a Lifetime ISA this December and pay in 4k, I get 1k bonus for year 2019, then I can pay another 4k in January to get the max bonus for 2020 I open a Lifetime ISA this December and pay in 4k, I get 1k bonus, but this maxes out the bonus and I have to wait 365 days to get another 1k on my next 4k saving0 -
Thanks for the quick reply. My follow-up question is, when is the bonus calculated/applied, is it tied to the tax year as well?0
-
No, it's only the deposit allowance that's aligned with tax years; the bonus is paid at 25% of each and every contribution, within 4-8 weeks of the deposit, regardless of which tax year the money is paid in.Thanks for the quick reply. My follow-up question is, when is the bonus calculated/applied, is it tied to the tax year as well?0 -
Hi,
I've tried to do the research to decide whether a LISA is the right thing for my circumstance but could do with a bit of advice please.
I'm 40 in May 2020, so I'm looking at now or never regarding a LISA.
I already pay into my work pension and already get the maximum match from my work. However I'm able to pay in as much % into my pension as I want.
I'm in the higher rate tax band.
So should I:
a) pay £4000 per year into a LISA for the next 10 years...and then sit on that until I'm 60.
b) I up my pension contribution by £4000 per year, meaning I avoid the higher rate tax on that now, but I'd still pay 20% tax on it when I get it later on in life
with option a) I'd pay into the LISA for 10 years then from years 11-20 I'd up my pension.
Any help greatly appreciated!
Jon0 -
There isn't a simple answer to that....
You can do the maths to work out which is likely to be best from a straight financial perspective, which will entail greater knowledge of exactly how money would flow from employer to pension, i.e. NI savings, salary sacrifice, etc (which mean that in reality you won't be comparing £4K into pension with £4K into LISA, as the former would typically be from gross income and the latter net), plus more detail about how much of your pension might not be taxed at 20% (either above or below) in retirement.
There's also the matter of where the money will be invested and what the charging regime is - chances are that you'll have less say in where the pension money is invested and that it'll be more expensive than a LISA.
Then there are softer issues to factor in, such as pension money being accessible at 55 rather than 60 for the LISA, together with it being ring-fenced away from available assets in the event of needing to claim benefits or secure care funding in future.0 -
How about this comparison, £4,000 net to invest and you are a higher rate taxpayer:JonHeath1980 wrote: »Hi,
I've tried to do the research to decide whether a LISA is the right thing for my circumstance but could do with a bit of advice please.
I'm 40 in May 2020, so I'm looking at now or never regarding a LISA.
I already pay into my work pension and already get the maximum match from my work. However I'm able to pay in as much % into my pension as I want.
I'm in the higher rate tax band.
So should I:
a) pay £4000 per year into a LISA for the next 10 years...and then sit on that until I'm 60.
b) I up my pension contribution by £4000 per year, meaning I avoid the higher rate tax on that now, but I'd still pay 20% tax on it when I get it later on in life
with option a) I'd pay into the LISA for 10 years then from years 11-20 I'd up my pension.
Any help greatly appreciated!
Jon
Money going in:
Pension - £4000 in = £6,667 pot.
LISA - £4000 in = £5,000 pot.
Money coming out:
Pension if still 40% taxpayer = £6,667x25% + £6,667x75%x60% = £4,667.
Pension if then a 20% taxpayer = £6,667x25% + £6,667x75%x80% = £5,667
LISA £5,000x100% = £5,000
If you expect to be a basic rate taxpayer when you draw down the pension then the pension will give you a better return than the LISA but if you expect to still be a higher rate taxpayer then the LISA is a better option.0
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608.1K Mortgages, Homes & Bills
- 173.1K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards