Lifetime ISAs guide
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The payment of interest is confusing. My two children aged 19 and 21 have opened a stocks & shares ISA each but we're unsure whether it is better to do future top ups each month, or as a lump sum, to spread the risk and get the most interest. Is 25% added to the final amount you've accrued at the end of this financial year i.e. March/April 2018? That seems quite generous if you start off with £100 then put in £3900 in the last month. Sorry if I'm not understanding!0
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I've been eagerly awaiting the arrival of April 6th and the launch of the new LISA, so I'm extremely disapointed that there seems to actually be no LISAs available to open now the new tax year is here.
Will MSE give us an immediate heads up as soon some become available as I'm keen to swtich from H2B to LISA. I've cancelled my current direct debit to the H2B because I don't want to pay into an ISA in this tax year and scupper myself from opening a LISA. However, if there aren't any available then I'm missing out on the payments towards the house by sitting here waiting for a LISA to turn up.
Advice please?*********************************************************************
jack-knight.graphics
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jackknight wrote: »I've been eagerly awaiting the arrival of April 6th and the launch of the new LISA, so I'm extremely disapointed that there seems to actually be no LISAs available to open now the new tax year is here.
Will MSE give us an immediate heads up as soon some become available as I'm keen to swtich from H2B to LISA. I've cancelled my current direct debit to the H2B because I don't want to pay into an ISA in this tax year and scupper myself from opening a LISA. However, if there aren't any available then I'm missing out on the payments towards the house by sitting here waiting for a LISA to turn up.
Advice please?
There are stocks and shares LISAs available. Skipton are releasing a cash LISA in June.
You can pay into other ISAs as well as a LISA.0 -
The payment of interest is confusing. My two children aged 19 and 21 have opened a stocks & shares ISA each but we're unsure whether it is better to do future top ups each month, or as a lump sum, to spread the risk and get the most interest. Is 25% added to the final amount you've accrued at the end of this financial year i.e. March/April 2018? That seems quite generous if you start off with £100 then put in £3900 in the last month. Sorry if I'm not understanding!
The 25% isn't interest. It's a bonus on the amount subscribed in the year regardless of when it was subscribed or any interest/investment change.0 -
Thanks for the guide!
On the upper cap (£450,000) - is it clear whether or not this will change with inflation/market prices? I'm considering opening a LISA but looking to buy in London in 8-10 years and there's no way of knowing whether £450,000 will get you a decent two bed flat by then. Seems like it's asking people to gamble on prices not rising much?0 -
Thanks for the guide!
On the upper cap (£450,000) - is it clear whether or not this will change with inflation/market prices? I'm considering opening a LISA but looking to buy in London in 8-10 years and there's no way of knowing whether £450,000 will get you a decent two bed flat by then. Seems like it's asking people to gamble on prices not rising much?
There has been no indication that the £450k or the £4k will increase to keep pace with inflation, house price inflation, or anything else. Over time, some HMRC limits have ticked up each year or most years, and others haven't at all.
£450k is already insufficient to buy a good 2-bed in many nicer parts of London (and even a 1 bed in some) but is still well in excess of what would buy you a five bed in many parts of the country. Politically it can certainly be argued that if you have the salary and most of the deposit to buy a property costing almost half a million quid, you're probably not most in need of government support. So, i wouldn't go into it with the expectation that the limit is going to be going up.
If at some point it becomes obvious that the property you want is going to be out of your reach on the scheme, you can give up on using it for a deposit pot, abandon saving new money into it and start using it for retirement savings instead while doing your property savings in a different product. You could take your money back mostly or entirely, with a small penalty.
If you think you might want to go over the £450k limit and therefore will be taking your cash back out without buying, you would be better using the help-to-buy ISA instead which has a lower annual limit but penalty-free withdrawal if you decide it's going to be no good to you.0 -
Thanks for the guide!
On the upper cap (£450,000) - is it clear whether or not this will change with inflation/market prices? I'm considering opening a LISA but looking to buy in London in 8-10 years and there's no way of knowing whether £450,000 will get you a decent two bed flat by then. Seems like it's asking people to gamble on prices not rising much?
No automatic uprating mechanism has been provided for in the legislation. But like all amounts (e.g. ISA limit), they can be changed in the future by amending the regulations. In the case of the £4,000 limit, it can't be decreased unless the House of Commons approves a decrease in a vote. However it can be increased without a vote.0 -
Presumably your parents aren't putting down the whole mortgage deposit, so I can't see it being an issue. Even if they were buying jointly with you it wouldn't be a problem. All you need to do is make sure the proceeds from your HTB ISA or LISA are actually included in the funds used at completion and the property is in your name.
Yup, property will definitely be mine (and in my name...) and after looking into the 'Springboard mortgage' more - it appears their lump sum just gets held in an account and then returned to them after a few years and doesn't even count towards the property - it's just a safeguard sorta thing... Ie. Mortgage repayments / cost of the property don't even take it into consideration, thus the H2B/LISA combo (with bonuses) would help out greatly at bringing the cost of the property and ergo, repayments down!0 -
It does seem a but ridiculous to only allow accrued interest up to 5th April. With interest not counting as a subscription for ISAs in general there may well be no way of requesting interest accrued only up to that date to be transferred. It may well be that banks will only allow you to transfer the value of the account as at 5th April and leave the accrued interest where it is simply because they don't have the mechanisms in place to easily separate the accrued interest from before and after 5th April.
How would you use a flexible ISA?
Quite. Perhaps best practice come end of tax year will be to transfer H2B to LISA and let the banks see & calculate what max allowance is left to contribute to LISA (H2B interest calculated & paid on closure / transfer of ISA I imagine...) then just use leftover for following tax year LISA contribution .....0 -
Hello,
Im sorry if someone asked this question already...
Can i have and pay into it in the same tax year Help to buy CASH ISA and Lifetime CASH ISA?
Thank you.0
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