Nutmeg pulls plans to allow HTB ISA transfers to LISA

peter_333 · 1 November 2017 at 4:49PM

I've just received an email from Nutmeg, stating that their previous plan to allow a HTB ISA to be transferred into a Nutmeg LISA, will not longer go ahead. This has thrown a MASSIVE spanner in the works for my LISA plans, and I'm incredibly, incredibly frustrated and angered by the announcement. I've just finished a fairly grumpy phone call with their customer service team who have said that there's nothing they can do about it.

While I'm sure Nutmeg won't reverse the decision to abandon the HTB transfer facility, I thought it may be worth starting a thread to discuss how people plan to proceed, to overcome this new obstacle in their LISA plans.

For reference, here is the communication I had from Nutmeg on 7 April:

We are already working on building the functionality to transfer HTB ISAs in to the Nutmeg LISA and this will be one of the first additions that we make. I'm expecting this to be ready in the new few weeks, so I would say that it is certain that you will be able to transfer your HTB ISA to us well before 5th April 2018.

That's fairly unequivocal! I opened my LISA with them based on the certainty that the transfer service would be available. It wasn't a possibility that it would be available, it was a certainty!

Can others post any correspondence they had from Nutmeg regarding the HTB transfer being up and running before the end of the financial year? Might be useful in making a formal group complaint to a relevant regulatory body.

eskbanker · 1 November 2017 at 8:41PM

peter_333 wrote: »

This has thrown a MASSIVE spanner in the works for my LISA plans, and I'm incredibly, incredibly frustrated and angered by the announcement.

A bit of an overreaction there to be honest - all you need to do is to transfer your LISA to one of the other S&S LISA providers and then you can transfer your HTB in, job done, or am I missing something significant here? If you really wanted, you could then transfer back again (after consolidating the HTB) if you were of the view that nothing other than Nutmeg suits your needs....

Entirely up to you whether you want to devote a whole bunch of time and energy to trying to pursue Nutmeg for misleading promises but, as you recognise, they're not going to change their mind so what are you actually hoping to achieve as an outcome?

ricky989 · 1 November 2017 at 10:08PM

I am also very disappointed with this decision.

As far as I understand it if I withdraw my H2B ISA as cash and put in as much as I can into Nutmeg for the rest of this year (£3900 in my case - I have £100 in the LISA) and then the rest in the next tax year (approx £2800) I will be severely limited as to how much I can save at the end of next year due to using over half of my next years LISA allowance in April already!

I think I will have to move this LISA to a new provider, transfer ALL of my H2B in (Allowance free for this tax year) and then either stick with the new LISA provider or move back to nutmeg next year etc.

Argh!

Alexland · 1 November 2017 at 11:32PM

AJ Bell support HTB transfers in on their LISA and frankly offer better value for money on balances above £10k compared to Nutmeg. If you invest in something like Vanguard LifeStrategy 40/60/80 you will get similar performance. Just a pain to maintain the cash balance to pay the 0.25% account fee and £1.50 per trade.

ricky989 · 1 November 2017 at 11:50PM

AJ Bell do not offer transfer in from an existing LISA so what options do we actually have, does anyone know?

peter_333 · 2 November 2017 at 12:37AM

eskbanker wrote: »

A bit of an overreaction there to be honest - all you need to do is to transfer your LISA to one of the other S&S LISA providers and then you can transfer your HTB in, job done, or am I missing something significant here? If you really wanted, you could then transfer back again (after consolidating the HTB) if you were of the view that nothing other than Nutmeg suits your needs....

Sure, a bit of an overreaction in the moment, but I'm still pretty annoyed by them. The hassle of researching alternative providers and transferring the LISA is not insignificant. Sure, it might only be an evening or two of faf, but right now, my life really could really do without that headache.

Annoyed at myself too. A couple of different people warned me to avoid Nutmeg, one specifically saying that the company was a prime example of a start-up whose priority is slick marketing touting a fantastic product and platform that never lives up to their own hype. I'm really not convinced by their current cries of "We tried to get the HTB transfer up and running. We really did. Honest!"

peter_333 · 2 November 2017 at 12:49AM

ricky989 wrote: »

AJ Bell do not offer transfer in from an existing LISA so what options do we actually have, does anyone know?

Here's my current assessment:

Skipton seem to accept transfers from an existing LISA, and also currently allow transferring your HTB into the LISA.. However, MSE warns that "Skipton has a T&C which allows it to stop accepting transfers in." so the HTB transfer could disappear at any time.

AJ Bell, as you say, don't seem to currently allow opening an account via transfer of an existing LISA from another provider.

Hargreaves Lansdown seem to allow both transfer of an existing LISA and transfer of a HTB ISA. I am slightly put off by their £25 transfer or exit fees, but besides that, maybe they fit the bill.

The Share Centre was never an option for me, based on their ridiculously high management fees.

So it seems I either go with Skipton earning 0.5% interest and taking a risk that they pull the HTB transfer facility, or go with Hargreaves Lansdown.

Any other options I've missed?

Alexland · 2 November 2017 at 7:32AM

You have the option of waiting a bit longer for AJ Bell to get LISA transfers online?

Plus · 2 November 2017 at 10:20AM

I would have thought you can just roundtrip old money via Skipton:

1. Open Skipton LISA, transfer 2015/16 and 2016/17 money from HTB ISA
...wait for the transfer to arrive...
2. Transfer whole Skipton LISA to whoever is accepting transfers

This doesn't help with current year's HTB contributions you want to transfer. There you have two choices:

a. Transfer current HTB and LISA contributions from Nutmeg to Skipton before step 2 in the above

b. or, if you're not going to hit the £20K ISA limit, just pay up to 4K into your LISA and ignore this year's HTB. Some HTB ISAs are getting a good rate, so you might wish to keep money there as just another cash ISA if you can even though you're not going to claim the bonus on it. Or withdraw it and pay cash into the LISA.

If Skipton stop transfers into their LISA then we have a problem, however...

Plus · 2 November 2017 at 10:36AM

AJ Bell sent an email yesterday saying their HTB->LISA transfers are online:
https://www.youinvest.co.uk/lifetime-isa/help-to-buy-to-lifetime-isa

Chapuys · 2 November 2017 at 11:53AM

I plan to complain officially but doubt it will do anything. I am already eyeing up Skipton for December 9th (after my yearly ISA interest is paid out on my HTB ISA). I'm also wondering whether I should keep my £6k HTB ISA as just a regular saver and forgo the 25% bonus as I still get 3.5% on my HTB ISA.

Edit: Speaking to Skipton just now, they state that once the LISA is open by Nutmeg then Nutmegs start date still applies to the LISA in general. I'm less worried now. The customer service operator automatically new I was using Nutmeg so I wonder if they have had a lot of enquires.

Nutmeg pulls plans to allow HTB ISA transfers to LISA

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free