Transfer from S&S LISA into ISA?

Rawhy · 19 October 2019 at 9:09AM

If I start putting £4000 a year into a S&S LISA, with the intent of buying a house if I settle down, but never manage to. At age 60, can I transfer that into a normal S&S ISA (not LISA)?
I'm just not quite sure what the constraints are with a S&S LISA at the age of 60. There seems to be very little information online.

masonic · 19 October 2019 at 9:59AM

Yes, you can actually transfer a LISA to another type of ISA at any time with the following restriction:

"If you transfer cash and assets from a Lifetime ISA to a different ISA before the age of 60, you’ll have to pay a withdrawal fee of 25%"
https://www.gov.uk/individual-savings-accounts/transferring-your-isa

While it's reasonable to invest in a S&S LISA if you don't know if/when you'll buy a home, it would be sensible to move into cash well in advance of a house purchase if this becomes a clear plan.

Rawhy · 19 October 2019 at 10:52AM

masonic wrote: »

Yes, you can actually transfer a LISA to another type of ISA at any time with the following restriction:

"If you transfer cash and assets from a Lifetime ISA to a different ISA before the age of 60, you’ll have to pay a withdrawal fee of 25%"
https://www.gov.uk/individual-savings-accounts/transferring-your-isa

While it's reasonable to invest in a S&S LISA if you don't know if/when you'll buy a home, it would be sensible to move into cash well in advance of a house purchase if this becomes a clear plan.

From your last point, it's possible to transfer a S&S LISA into a cash LISA without the withdrawal fee of 25%? I didn't know that was possible, I thought it would be a different ISA and thus the 25% withdrawal fee applies.

eskbanker · 19 October 2019 at 11:06AM

Rawhy wrote: »

From your last point, it's possible to transfer a S&S LISA into a cash LISA without the withdrawal fee of 25%? I didn't know that was possible, I thought it would be a different ISA and thus the 25% withdrawal fee applies.

That wording in the quoted high-level gov.uk site is unhelpfully inaccurate - it should refer to a different type of ISA, as the more detailed info at https://www.gov.uk/guidance/lifetime-isas-for-isa-managers does:

LISAs can also be transferred to other types of ISAs. These transfers [...] have a 25% withdrawal charge applied when LISA funds are transferred to any account that is not a LISA or to any unapproved financial institution

Rawhy · 19 October 2019 at 11:14AM

Thank you both so much! That has really cleared up a lot of my concerns. I'll be investing £4000 a year into a S&S LISA, and transferring it into a cash LISA a few years before I buy a house. Thanks again!

Transfer from S&S LISA into ISA?

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