LISA after first year
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marmitemum
Posts: 74 Forumite
My daughter and her husband opened LISAs last April and so have just got their first bonus payment. They hope to buy their first home in August/September. They have not deposited any money into their accounts since the bonus as they were not sure what happens next, Is there any value in depositing any more money into their LISAs if they’re gong to be using them this summer? Is any interest paid after the first year on monies already there or only on new deposits? And when is it paid? Thanks!
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25% government bonus will be added onto any new contributions (up to cap of £4K per tax year) so definitely worth doing if they have money to do so. If they pay in by 5 June then the bonus will be paid by around the end of June.
Interest is only applicable for cash LISAs but there weren't any cash LISAs available last April so they presumably have S&S LISAs?0 -
Thanks so much for replying. My mistake! They opened them in May last yea with Skipton. So If each paid in a whole £4K by 5tn June, would they get 25% interest on it at the end of June or have I misunderstood?0
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marmitemum wrote: »Thanks so much for replying. My mistake! They opened them in May last yea with Skipton. So If each paid in a whole £4K by 5tn June, would they get 25% interest on it at the end of June or have I misunderstood?
This year, bonuses are collected and applied to the account on a rolling monthly basis, with the bank doing a claim to HMRC based on what has been paid in since the last bonus was applied for from HMRC.
So yes if they max out their £4k annual subscription allowance in one month, they will get the 25% on all of it hwhen the month's deposits have been added up and the bonus claimed from HMRC by Skipton.
The 25% from HMRC is not interest, but a bonus. The account has an interest rate just like a normal bank or building society account which pays - separately from the bonus - interest on the amounts in the account from time to time (whether those amounts in the account got there by deposit, transfer in of another ISA, or bonus).0 -
Thank you so much! The Bank of Mum and Dad were planning on surprising them with a gift of money anyway to boost their deposit, so it sounds like we should do this now via their LISAs to get an extra grand on each account!0
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marmitemum wrote: »Thank you so much! The Bank of Mum and Dad were planning on surprising them with a gift of money anyway to boost their deposit, so it sounds like we should do this now via their LISAs to get an extra grand on each account!
Yes this is a best option if you are looking to use the LISA soon.0
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