Lifetime ISAs guide

Wikikenkey wrote: »

Hi - Am I right in thinking that if I opened a Lifetime ISA today with a £1 and deposited £4000 in the account sometime late March this year, I should receive £1000 bonus sometime in July this year? For my next bonus of £1000 I would need to deposit another £4000 by April 2020?

The tax year to make up to £4k of contributions starts on 6th April and ends on 5th April.

It is fine to make a contribution towards the end of the tax year and recieve the associated bonus early next tax year.

Each month LISA providers will look at contributions made between the 6th of the previous month and 5th of the current month. They will then send a bonus claim for those transactions which takes them around a 3 weeks to get the money and add into the LISA account.

Beware making LISA contributions too close to the end of the tax year as it doesn't give any time to resolve issues that could cause the contribution to be rejected.

However yes if you contribute in March then I would expect the bonus to be added towards the end of April. You shouldn't have to wait until July under normal circumstances.

Alex

Kayle2019 wrote: »

Is it possible to get some advice.... currently using a Help to Busy ISS which has just over £8000 in it. Not going to buy a house within 1 year but will potentially in next 2 years. I stand to not get any of the 25% bonus from help to buy ISA as house price likely above £250k. Would like to move to lifetime ISA to make use of 25% bonus on house up to £450k- however if I transfer my money from help to buy to lifetime ISA how would I go about this- 2 transactions in 2 years?

Yes, open a LISA asap and transfer £4K from your HTB ISA before the end of this tax year (5 April) and another £4K during the 2019/20 tax year, then whatever's left after April 2020.

Kayle2019 wrote: »

And would this then not count to getting the bonus as it has been saved in a previous ISA?

LISA bonuses are paid on valid contributions into the account, which these will be, so where the money had been before doesn't make any difference....

Quick question if I may. I’m sure this has been asked before but couldn’t see a clear answer. Are LISAs protected by the FSCS only up to £85,000 or the whole pot?

Thanks

They're subject to the usual FSCS limits, so a cash LISA is protected to £85K, but it would take about 16 years to reach that sort of balance, and it wouldn't make sense to use a cash deposit product for that length of time so the point is largely moot!

Thank you. Understandibly the cash LISA makes more sense when saving towards a first home but how about as a retirement planning supplementary saving pot?

Being aged 33 myself, so potentially 16/17 years worth of deposits/bonus would be a bit concerning if the whole pot wasn't protected.

gilly4321 wrote: »

Thank you. Understandibly the cash LISA makes more sense when saving towards a first home but how about as a retirement planning supplementary saving pot?

Being aged 33 myself, so potentially 16/17 years worth of deposits/bonus would be a bit concerning if the whole pot wasn't protected.

The FSCS protection for S&S LISAs is largely irrelevant because the shares are held in a nominee account that's ring-fenced from the business. If the business went bust, then investments would be safe and the only loss would come from the expenses and fees of an Administrator, which in previous cases have been capped and which would be highly unlikely to ever exceed £85,000 per client.

Even imagining a worst-case scenario, a £300k pot would have full coverage if fees and expenses added up to 25% of assets under management.