Lifetime ISAs guide

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  • Ed-1
    Ed-1 Posts: 3,888 Forumite
    First Anniversary Name Dropper First Post
    edited 15 March 2017 at 9:07PM
    ISAISAbaby wrote: »
    If the 2017/18 LISA bonus is paid in a lump sum at the end of the year, is it possible to put the 4k in in the last week of the 17/18 tax year and still earn the whole bonus of 1k? This allows the 4k to earn interest somewhere else for the overwhelming majority of the tax year and not just sit idly for the whole year.

    You can contribute when you want in a tax year. 25% of the amount contributed will be added in April 2018 and then 25% of the amount contributed in the prior month will be added from May 2018 onwards every month. You'll also get interest in the LISA at whatever rate offered by the provider.
  • Plus
    Plus Posts: 433 Forumite
    First Anniversary First Post Combo Breaker
    Another provider saying they will launch a S&S LISA from 6th April is The Share Centre. No word on fees.
  • hardleyouth
    hardleyouth Posts: 515 Forumite
    First Post First Anniversary
    masonic wrote: »
    I'd assume they would be the same as the ISA fees unless they announce something different.


    If anyone is interested, I asked Hargreaves Lansdown what fees would be charged on their S&S LISA and below is the response (Masonic was right):


    The charges for our Lifetime ISA will be the same as our current Vantage Stocks & Shares ISA.

    The Vantage Stocks & Shares ISA has an annual management fee of 0.45% (capped at a maximum of £45 per annum). This fee is charged on shares, investment trusts, ETFs, gilts and single corporate bonds. Where a management fee applies on the Vantage ISA, this is calculated on the value of the underlying holdings that attract a fee on the last day of the month.

    There is a separate charging structure in place for funds held within Vantage, and this charge is applied across each Vantage account separately with no cap. For the first £250,000 of funds within each Vantage account, the charge will be 0.45% per annum. On the value of funds between £250,000 and £1m this will be 0.25% p.a. between £1m and £2m this will be 0.1% and there will be no charge on the value of funds above £2m.

    For more information on charges you are able to follow the attached link.
  • JJ01234
    JJ01234 Posts: 1 Newbie
    First Anniversary
    Over the past week or so I have called round over 10 banks and none of them are offering the Lisa. I don't particularly want a s&s Isa, so what happens if no banks offer it? Will the scheme just be scrapped?
  • masonic
    masonic Posts: 23,240 Forumite
    Photogenic Name Dropper First Post First Anniversary
    JJ01234 wrote: »
    Over the past week or so I have called round over 10 banks and none of them are offering the Lisa. I don't particularly want a s&s Isa, so what happens if no banks offer it? Will the scheme just be scrapped?
    Nobody can legally offer a LISA yet. It is not as though the legislation creating this product has been passed. I'm not really surprised most companies want some more time so that they know exactly what the regulatory requirements of these accounts will be. Several companies have committed to offering one from the start of next tax year, which is the most that could be hoped for at such an advanced stage.
  • Plus
    Plus Posts: 433 Forumite
    First Anniversary First Post Combo Breaker
    hardleyouth wrote: »
    If anyone is interested, I asked Hargreaves Lansdown what fees would be charged on their S&S LISA and below is the response (Masonic was right):

    Given the lack of options at this stage, HL might not be the worst for those who want to open one soon. But, for the limited amounts allowed to be invested in a LISA, the exit fees are going to bite.
  • sw2000sw
    sw2000sw Posts: 1 Newbie
    I read that you must get a mortgage alongside the LISA, thus cannot use it with cash to buy your first home. Is there any rules regarding the amount of the mortgage required? - I am hoping to have nearly enough cash to buy my home outright, so would be looking at a minimal mortgage.
  • badger09
    badger09 Posts: 11,200 Forumite
    First Post First Anniversary Name Dropper
    hardleyouth wrote: »
    If anyone is interested, I asked Hargreaves Lansdown what fees would be charged on their S&S LISA and below is the response (Masonic was right):

    "Quote:
    The charges for our Lifetime ISA will be the same as our current Vantage Stocks & Shares ISA.

    The Vantage Stocks & Shares ISA has an annual management fee of 0.45% (capped at a maximum of £45 per annum). This fee is charged on shares, investment trusts, ETFs, gilts and single corporate bonds. Where a management fee applies on the Vantage ISA, this is calculated on the value of the underlying holdings that attract a fee on the last day of the month.

    There is a separate charging structure in place for funds held within Vantage, and this charge is applied across each Vantage account separately with no cap. For the first £250,000 of funds within each Vantage account, the charge will be 0.45% per annum. On the value of funds between £250,000 and £1m this will be 0.25% p.a. between £1m and £2m this will be 0.1% and there will be no charge on the value of funds above £2m.

    For more information on charges you are able to follow the attached link."

    Is it just me or is that paragraph (my bold) of the reply from HL very misleading?
  • karl271186
    karl271186 Posts: 12 Forumite
    Could we not just contribute £1 to a S&S LISA and just leave it in the account without actually investing it and then when a Cash LISA comes along transfer it out? That way we still get the 1 year countdown.
  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
    Name Dropper First Post First Anniversary Post of the Month
    karl271186 wrote: »
    Could we not just contribute £1 to a S&S LISA and just leave it in the account without actually investing it and then when a Cash LISA comes along transfer it out? That way we still get the 1 year countdown.

    We could. Well, you could, I can't because I'm already 40 :( It is already an idea suggested in the articles on the main site and threads on the forum such as this one.

    However, you'll find some/most S&S providers do not want to take on customers for a pound and establish their accounts for free just to be used as a stop-gap warehouse for your £1 contribution before making them transfer it somewhere else for free. So, the providers will generally have minimum contribution levels and likely have transfer-out or account closure fees.

    You probably don't want to put £31 into an account, then later pay a £25+VAT exit charge to leave yourself with the £1 being transferred out to your longer-term provider of choice. Some people might, because of their desperation to get their bonus and be allowed to spend it asap after the first bonus is credited, because the bonus on £4k is larger than the £30 thrown away.
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