Lifetime ISAs guide

1…8788909293…254

Comments

  • eskbanker
    eskbanker Posts: 30,979 Forumite
    First Anniversary Name Dropper Photogenic First Post
    Ed-1 wrote: »
    You also need to bear in mind that you'll get the bonus quicker from next tax year as it's paid on a rolling monthly basis rather than at the end of the tax year. So you'll get growth on the bonus too.
    Yes, the poster is bearing that in mind already (hence the first line of the question) but it only takes 0.625% interest on £4K to outperform the 0.5% on the bonus-inclusive £5K, which should be readily achievable!
  • System
    System Posts: 178,093 Community Admin
    Photogenic Name Dropper First Post
    NevvyC wrote: »
    Does anyone know here what a typical 'salary multiplier' mortgage providers offer ? Just trying to work out what salary I might need to work for in order to buy a certain value property ...

    For example, Barclays were offering a 4x multiplier for a certain scheme (but imagine there are far better offers out there if you trump up more deposit £££)

    Thanks for any insight in advance !


    Just wondering if anyone is able to shed any light / experience on this ...

    As I'm currently wishing to purchase a property ASAP (so am weighing up schemes like Barclays H2B vs selling my business and using those funds as deposit - something I'd rather not do! vs waiting until end of May 2018 where I will have (hopefully) put 4K into my LISA pre-April 5th & 4K post-April 5th along with a H2B transferred in during March '18 totalling around 12K including the govt bonuses...)

    Salary may be a bit of an obstruction at the moment (but I'm working on it...) and could trump up a 10% deposit selling my business in a pretty short space of time ; *SO* another question is... Are there any mortgage lenders that will take a 10% deposit ?? (Clearly I'd have to do something about the monthly repayments by increasing my salary or getting a tenant in etc. but just seeing what my options are!) Any help is much appreciated :)
  • eskbanker
    eskbanker Posts: 30,979 Forumite
    First Anniversary Name Dropper Photogenic First Post
    As this isn't really specifically an ISA/tax-free savings matter, you'd probably be better posting on the mortgages & endowments board and/or reading the articles in the main MSE section on mortgages, including the 'how much can I borrow?' calculator.
  • spy
    spy Posts: 46 Forumite
    Name Dropper First Anniversary Combo Breaker First Post
    In terms of how many years of contributions you can make is it based on your age or tax years e.g. If your birthday was in August would your last contribution be just after your 49th birthday or if you put £4K in on the day after your 49th birthday then can you put in another £4K after 6th April the following year but before your 50th birthday?
  • eskbanker
    eskbanker Posts: 30,979 Forumite
    First Anniversary Name Dropper Photogenic First Post
    spy wrote: »
    In terms of how many years of contributions you can make is it based on your age or tax years e.g. If your birthday was in August would your last contribution be just after your 49th birthday or if you put £4K in on the day after your 49th birthday then can you put in another £4K after 6th April the following year but before your 50th birthday?
    See clause 9B.10 of the official rules, which states that:
    Payments to a Lifetime ISA may be made any time before the account investor’s 50th birthday
  • apinner
    apinner Posts: 2 Newbie
    First Anniversary Combo Breaker
    As Martin has outlined, currently it is best to open a LISA with the minimum amount and invest our cash in other, more rewarding savings accounts up until March 2018.

    With this in mind, my question is whether it is possible to invest £4,000 into a LISA in March 2018 and then an additional £4,000 in early April, after the beginning of the new tax year?

    If this is the case, when will the bonuses be paid into the accounts?

    Finally, if the above-mentioned is not possible, when would we be able to deposit the additional £4,000?

    Thanks
  • eskbanker
    eskbanker Posts: 30,979 Forumite
    First Anniversary Name Dropper Photogenic First Post
    apinner wrote: »
    With this in mind, my question is whether it is possible to invest £4,000 into a LISA in March 2018 and then an additional £4,000 in early April, after the beginning of the new tax year?

    If this is the case, when will the bonuses be paid into the accounts?
    Yes, the LISA allowances, like other ISAs (except HTB), are annual, so theoretically you can pay in the full annual allowance of £4K on the last day of one tax year and then again on the first day of the next tax year, so yes, you can pay in another £4K on 6 April 2018.

    LISA bonuses are being handled as an annual process for 2017/18 and will be paid in late April or maybe early May 2018 for 2017/18 contributions, whether these are made on 5 April 2018 or 6 April 2017.

    Once the 2018/19 tax year has started, bonuses will be paid based on contributions during monthly periods from 6th of one month to 5th of the next, so any contributions between 6 April 2018 and 5 May 2018 will receive a bonus payment of 25% of their value in late May or early June 2018.
  • notquitemilennial
    notquitemilennial Posts: 1 Newbie
    Hi -

    I am saving for a deposit - I have a Halifax Help to Buy ISA, into which I put £200 monthly. I have another low interest savings account (Natwest) into which I save whatever I can per month, on top of the £200 (around £500 - 600 pcm, total around £800 pcm).

    I also opened a Skipton LISA with a tiny deposit earlier this tax year.

    I was hoping to transfer 4k from the NatWest account at some point before the end of the tax year, and then another 4k in April; all the time keeping on putting in £200 in the Halifax Help to Buy each month.

    When it comes to it, I'll cash in the Halifax account and transfer to the LISA, using the lump sum for a deposit.

    Am I allowed to do this? I didn't realise until recently that it might not be permitted to save into two ISAs in the same year.

    I also need to think about what to do with the cash in the Natwest account, as it's just sitting there accruing no interest at the moment.

    Please help me Martin! (or equally, followers of Martin)
  • eskbanker
    eskbanker Posts: 30,979 Forumite
    First Anniversary Name Dropper Photogenic First Post
    notquitemilennial wrote: »
    I was hoping to transfer 4k from the NatWest account at some point before the end of the tax year, and then another 4k in April; all the time keeping on putting in £200 in the Halifax Help to Buy each month.

    When it comes to it, I'll cash in the Halifax account and transfer to the LISA, using the lump sum for a deposit.

    Am I allowed to do this? I didn't realise until recently that it might not be permitted to save into two ISAs in the same year.
    You can pay into an HTB ISA and a LISA in the same tax year but (with the exception of pre-2017/18 HTB contributions) anything you transfer from HTB to LISA counts towards the £4K annual LISA allowance for that year, so you wouldn't be able to pay £4K into a LISA and then transfer anything from an HTB (or any other) ISA later in the same tax year.

    And, just in case you weren't aware of it, you can't get a 25% bonus on both HTB ISA and LISA when making a first-time property purchase, so you need to plan which way to go. Some are continuing to use the HTB even in the knowledge that there won't be a 25% bonus at the end of it (if they're using a LISA too), as the interest rate is pretty competitive even without the bonus.
    notquitemilennial wrote: »
    I also need to think about what to do with the cash in the Natwest account, as it's just sitting there accruing no interest at the moment.
    Look at http://www.moneysavingexpert.com/savings/which-saving-account - start making use of regular savings accounts and perhaps some interest-paying current accounts for example.
  • apinner
    apinner Posts: 2 Newbie
    First Anniversary Combo Breaker
    eskbanker wrote: »
    Yes, the LISA allowances, like other ISAs (except HTB), are annual, so theoretically you can pay in the full annual allowance of £4K on the last day of one tax year and then again on the first day of the next tax year, so yes, you can pay in another £4K on 6 April 2018.

    LISA bonuses are being handled as an annual process for 2017/18 and will be paid in late April or maybe early May 2018 for 2017/18 contributions, whether these are made on 5 April 2018 or 6 April 2017.

    Once the 2018/19 tax year has started, bonuses will be paid based on contributions during monthly periods from 6th of one month to 5th of the next, so any contributions between 6 April 2018 and 5 May 2018 will receive a bonus payment of 25% of their value in late May or early June 2018.

    So in my instance it would make far more sense to do the following:

    Now - Open up LISA with minimum contribution
    Now - Establish savings account paying better interest than the LISA

    April 5 2018 - Transfer £4,000 into LISA
    April 6 2018 - Transfer £4,000 into LISA

    In terms of receiving bonuses, if I were to engage in the above transactions I would expect them as follows:

    April 2019 - £1,000
    May 2019 - £1,000

    Then, If I were to deposit an additional £4,000 on April 6 2019 I can expect to receive the bonus the following month?

    Thanks for the help!
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.2K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.2K Work, Benefits & Business
  • 608K Mortgages, Homes & Bills
  • 173K Life & Family
  • 247.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards