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  • FIRST POST
    • MSE Helen Saxon
    • By MSE Helen Saxon 16th Mar 16, 5:06 PM
    • 75Posts
    • 44Thanks
    MSE Helen Saxon
    Lifetime ISAs guide
    • #1
    • 16th Mar 16, 5:06 PM
    Lifetime ISAs guide 16th Mar 16 at 5:06 PM
    Hi!

    This is the discussion thread for the



    Click reply below to discuss. If you havenít already, join the forum to reply. If you arenít sure how it all works, read our New to Forum? Intro Guide.


    Thanks folks,
Page 65
    • NAD57891
    • By NAD57891 5th Feb 18, 5:23 PM
    • 5 Posts
    • 2 Thanks
    NAD57891
    To be honest you are where you are and if HMRC detect a problem they will probably contact you anyway. If you have not sought any unfair advantage from the situation and remained within the LISA and overall ISA contributions for the year I would imagine they will be reasonable and you should still get your LISA bonus.
    Originally posted by Alexland
    Yes that's hopefully what would happen if there has been an error. It's still good to find out and share, I've discussed it further and it seems like what I've done is fine. However, the issue is a difficult one to understand and clearly there's conflicting information.

    I did also confirm with HL that the interest added this year into my H2B ISA would count towards the Lifetime ISA allowance. I didn't get into the whole when and on which year's subscription, I'll play it on the safe side and keep under the allowance.

    Imagine if the LISA is invalidated because of this and subsequently I've closed my H2B so lost that - I'll be knocking on number 10!

    Thanks for the help and clarity!
    • realaledrinker
    • By realaledrinker 5th Feb 18, 7:10 PM
    • 1,559 Posts
    • 532 Thanks
    realaledrinker
    Got a letter today From Skipton refusing a £250 contribution to my LISA saying it would take me over the £4,000 limit. Considering that I have only last month moved my HTB ISA from Halifax value £5,600-ish this is nonsense. I put on the application form that my year to date HTB contribution was £1,800. There is no way a HTB ISA could bust the £4,000 limit as they have a max contribution of £200/month. Secure message sent and I await a response.
    Ethical moneysaver
    • Alexland
    • By Alexland 5th Feb 18, 7:41 PM
    • 2,229 Posts
    • 1,623 Thanks
    Alexland
    Got a letter today From Skipton refusing a £250 contribution to my LISA saying it would take me over the £4,000 limit. Considering that I have only last month moved my HTB ISA from Halifax value £5,600-ish this is nonsense. I put on the application form that my year to date HTB contribution was £1,800. There is no way a HTB ISA could bust the £4,000 limit as they have a max contribution of £200/month. Secure message sent and I await a response.
    Originally posted by realaledrinker
    Yes assuming you have made no other contributions that sounds fine. Still it serves as a warning to others to get your final LISA contributions in early incase there are unexpected delays.
    • Buckets86
    • By Buckets86 5th Feb 18, 7:56 PM
    • 4 Posts
    • 0 Thanks
    Buckets86
    Hello,


    I am looking to buy somewhere as soon as possible this year, and currently have a Santander HTB ISA and a Nutmeg LISA, opened in April 2017 with the minimum £100.


    There are 2 things I'm unclear about at the moment:


    1. Should I switch my Nutmeg S&S LISA to a Skipton Cash one now? Or is it not worth it for a few months? From what I've read above, this wouldn't 'stop the clock' which started when I opened the Nutmeg LISA. I obviously also need to transfer my HTB ISA in too (by the end of Feb if I switch to Skipton).
    2. When should I start looking seriously/when can I realistically put in an offer on a property? From what I've read, the bonus won't be added until a few weeks after I've had the LISA open for a year, ie. mid/late April.


    Thank you in advance!
    • Kami J
    • By Kami J 5th Feb 18, 9:07 PM
    • 8 Posts
    • 3 Thanks
    Kami J
    'outside of London limits' - do you mean the property will be in London above £450k (in which case beware the LISA withdrawal penalty would apply) or the property will be outside London and between £250k and £450k in which case a LISA would be fine?

    I suggest you read all the information on the Skipton website first then if you want to talk to them to check or confirm anything it's just the cost of an 0345 phone call. Their cutoff date for a HTB ISA transfer this year is the end of Feb but I would get it started early in case there are any unexpected delays.

    Alex.
    Originally posted by Alexland
    I meant it could be outside of London location wise, but under 450k instead of under 250k.

    I will give Skipton a call tomorrow.
    • Buckets86
    • By Buckets86 5th Feb 18, 11:37 PM
    • 4 Posts
    • 0 Thanks
    Buckets86
    I have just discovered that Nutmeg are not accepting transfers from HTB ISAs so I have answered part of my own question!
    • bmod28
    • By bmod28 6th Feb 18, 12:00 AM
    • 1 Posts
    • 0 Thanks
    bmod28
    Transfer of non-HTB cash ISA into LISA
    Hi,

    Sorry if this has already been answered on the thread but when I searched I couldn't see any results that answered the following question:

    I am transferring my HTB ISA balance into a Skipton LISA and I want to top up the contribution to 4k to get the maximum bonus this year.
    My savings are currently in an ISA with Newcastle Building Society, can I transfer money from this ISA into the LISA? (it would be a partial transfer as my savings are greater than the LISA contribution limit)

    Thanks in advance for any help and advice
    • eskbanker
    • By eskbanker 6th Feb 18, 12:30 AM
    • 6,795 Posts
    • 7,047 Thanks
    eskbanker
    My savings are currently in an ISA with Newcastle Building Society, can I transfer money from this ISA into the LISA? (it would be a partial transfer as my savings are greater than the LISA contribution limit)
    Originally posted by bmod28
    Yes (provided you keep all current year contributions together), see https://www.skipton.co.uk/savings/isas/lifetime-isa/faqs
    • lucycbell
    • By lucycbell 6th Feb 18, 3:56 PM
    • 2 Posts
    • 1 Thanks
    lucycbell
    Does anyone know whether my partner and I can buy a property together (both first time buyers) - if I have a Lifetime ISA and he has a Save to Buy ISA?
    • Alexland
    • By Alexland 6th Feb 18, 4:29 PM
    • 2,229 Posts
    • 1,623 Thanks
    Alexland
    Does anyone know whether my partner and I can buy a property together (both first time buyers) - if I have a Lifetime ISA and he has a Save to Buy ISA?
    Originally posted by lucycbell
    Yes that's fine but would your partner not want either a LISA or HTB ISA to benefit from the 25% bonus? If he has contributed to the Save to Buy ISA this tax year he would need to have the HTB ISA with the same provider. Also remember LISAs need to be open 12 months before using them to buy a property without penalty.

    Alex
    Last edited by Alexland; 06-02-2018 at 4:33 PM.
    • lucycbell
    • By lucycbell 6th Feb 18, 4:53 PM
    • 2 Posts
    • 1 Thanks
    lucycbell
    Yes that's fine but would your partner not want either a LISA or HTB ISA to benefit from the 25% bonus? If he has contributed to the Save to Buy ISA this tax year he would need to have the HTB ISA with the same provider. Also remember LISAs need to be open 12 months before using them to buy a property without penalty.

    Alex
    Originally posted by Alexland
    Thanks Alex, he has Help to Buy ISA already but I want a LISA as you can save more money in it
    • elicorde
    • By elicorde 6th Feb 18, 7:13 PM
    • 3 Posts
    • 1 Thanks
    elicorde
    LISA bonus confusion!
    Hi all, I am sure the information I need will be somewhere in this thread but I am getting so confused about the ins and outs of the LISA I would really really appreciate someone answering my questions My partner and I currently have about £12,500 in two Help 2 Buy ISAs which we're planning on transferring to LISAs before April to get the extra bonus.

    My question is - how does the LISA bonus work after April '18? From what I've managed to understand, you get like 1/12 of 25% added on per month, so you couldn't just transfer the whole £4k in just before April '19 to get the £1k bonus like you could in year 1? So it would be better to transfer £4k in all at once at the beginning of the new tax year i.e. after April '18?

    Thank you so much anyone who takes the time to answer what must seem like really basic questions!
    • eskbanker
    • By eskbanker 6th Feb 18, 7:33 PM
    • 6,795 Posts
    • 7,047 Thanks
    eskbanker
    how does the LISA bonus work after April '18? From what I've managed to understand, you get like 1/12 of 25% added on per month, so you couldn't just transfer the whole £4k in just before April '19 to get the £1k bonus like you could in year 1? So it would be better to transfer £4k in all at once at the beginning of the new tax year i.e. after April '18?
    Originally posted by elicorde
    Sounds like you've misunderstood the new monthly bonus payment arrangement that kicks in in the new tax year - it isn't split into twelfths but paid in full the month after the contributions are made.

    So, if you pay £4K into a LISA at the very start of the tax year on 6 April, you'll get a £1K bonus paid in late May (2018). Whether this is better than funding the LISA at the end of the tax year (which is also an option which would pay a full bonus) depends on various factors, such as when you'd be buying and what else you'd plan to do with the money in the mean time, given that Skipton's paltry 0.75% interest isn't hard to beat....
    • elicorde
    • By elicorde 6th Feb 18, 7:56 PM
    • 3 Posts
    • 1 Thanks
    elicorde
    Thanks so much for responding I wrote that post very confusingly reading it back! So what I'm talking about is the year 2 bonus, from April 18-19, does that work in the same way as the one you get for paying in in March this year? It's just the MSE guide says this, which confused me:

    "First year's bonus paid in April/May 2018; after which it's paid monthly"

    So for the second bonus, does it matter when you pay into the LISA as to how much bonus you get? Thanks again and sorry if I'm getting the wrong end of the stick again!!
    • Kim_13
    • By Kim_13 6th Feb 18, 9:17 PM
    • 1,901 Posts
    • 2,035 Thanks
    Kim_13
    Thanks so much for responding I wrote that post very confusingly reading it back! So what I'm talking about is the year 2 bonus, from April 18-19, does that work in the same way as the one you get for paying in in March this year? It's just the MSE guide says this, which confused me:

    "First year's bonus paid in April/May 2018; after which it's paid monthly"

    So for the second bonus, does it matter when you pay into the LISA as to how much bonus you get? Thanks again and sorry if I'm getting the wrong end of the stick again!!
    Originally posted by elicorde
    The bonus depends purely on what you pay in. So if you paid in £4,000 on April 6th, it would earn a £1,000 bonus the following month. The £4,000 would earn the same £1,000 bonus if you waited until (say) 1st April 2019 to pay it in (assuming there is no change in the rules, of course.) If you staged the deposits into 4 lots of £1,000 over 4 different months for example, each bonus would be £250, but over the course of the year you're still earning the same £1,000 bonus
    Sealed Pot 11 #520 ~ /£100
    VSP 2018 #9 ~ £19.55/£180.00
    CCCC 2018 #1 ~ £20.75/£180.00

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    • lpyy
    • By lpyy 6th Feb 18, 10:14 PM
    • 86 Posts
    • 14 Thanks
    lpyy
    The problem is that you are not allowed to transfer part of your split Cash ISA contributions for this year into another type of ISA. Under ISA rules you must transfer both parts which may not be possible (without partial withdrawal from the regular part) if it exceeds the LISA limit for this year.

    Alex
    Originally posted by Alexland
    Hi Alex,

    I would be grateful if you could kindly provide some further clarifications on the split cash isa please.

    I hold both cash & HTB ISA with NW and thinking to transfer the HTB to Skipton soon. I did not make any payments to the cash ISA last year apart from the interest earned & a credit transaction on 06 April 2017 due to payment made on 05 April 2017 night. I remember the last time I checked the account I was able to see what it is my current year ISA remaining balance and if I remember correctly NW did not deduct the 06 April 2017 payment from my annual ISA allowance so hopefully it is still treated as payment made in tax year 2016-2017 (strangely when I checked the website today again I can no longer see this infor..?).

    I was just wondering in my case would there be any problem to transfer out the H2B and leave the Cash ISA active until further instructions.

    Thank you!
    • elicorde
    • By elicorde 6th Feb 18, 11:47 PM
    • 3 Posts
    • 1 Thanks
    elicorde
    The bonus depends purely on what you pay in. So if you paid in £4,000 on April 6th, it would earn a £1,000 bonus the following month. The £4,000 would earn the same £1,000 bonus if you waited until (say) 1st April 2019 to pay it in (assuming there is no change in the rules, of course.) If you staged the deposits into 4 lots of £1,000 over 4 different months for example, each bonus would be £250, but over the course of the year you're still earning the same £1,000 bonus
    Originally posted by Kim_13
    Thank you So really, the best thing to do would be to keep the H2Bs open and pay the £200/month into those for the interest, and pay nothing more into the LISA until just before the end of the 2018-19 tax year, then pay in the £4k all at once to get the max bonus? The only advantage to paying more into the LISA early on would be to earn the 0.75% interest on the principle + the bonus, but you could earn a lot more interest elsewhere. OK, if that's all correct that's been really helpful, thank you to both responders!
    • Kreacher
    • By Kreacher 7th Feb 18, 4:09 PM
    • 86 Posts
    • 167 Thanks
    Kreacher
    Anything in the HTB ISA from previous tax year(s) does not count towards this year's limit.

    If transferring a HTB ISA to a LISA the maximum you can contribute this tax year across both accounts plus any interest paid on the HTB ISA this tax year (excluding any interest earned in the previous tax year but paid in this tax year) is £4k.

    So if you have contributed £100 to the LISA and £2,000 to the HTB then the amount you can still contribute to the LISA is £4000 - £100 - £2000 = £1,900 minus the interest earned this tax year.

    The interest earned this tax year will be any interest paid this tax year (minus any proportion of that payment earned in the last tax year) plus the final interest payment on transfering the old account.

    Alex
    Originally posted by Alexland
    Thank you. I spoke to Skipton to get confirmation and they said I have £2100 of my allowance left... Very confused!
    Save 12K in 2017 #023 = £1345/ £6000 (22.41%)

    Save 12K in 2016 #110 = £7500/ £6000 (100%)

    20k by April 2018 = £8845/ £20000 (44%)
    • NevvyC
    • By NevvyC 7th Feb 18, 5:46 PM
    • 60 Posts
    • 3 Thanks
    NevvyC
    Sounds like you've misunderstood the new monthly bonus payment arrangement that kicks in in the new tax year - it isn't split into twelfths but paid in full the month after the contributions are made.

    So, if you pay £4K into a LISA at the very start of the tax year on 6 April, you'll get a £1K bonus paid in late May (2018). Whether this is better than funding the LISA at the end of the tax year (which is also an option which would pay a full bonus) depends on various factors, such as when you'd be buying and what else you'd plan to do with the money in the mean time, given that Skipton's paltry 0.75% interest isn't hard to beat....
    Originally posted by eskbanker


    The 0.75 is low ...

    But considering people who have transferred HtB ISAs in and then maxing out this tax years 4K allowance... Such as myself ... Hypothetically, chucking another 4K in early on in the 18/19 tax year ; then 0.75% on this lump sum (say 8K minimum) soon stacks up, no ?

    I'm already trying to think ahead whether my *spare* funds would be best placed in a product like a 5% regular saver (where the max deposit is £200pcm) for another year or chucking that 2nd 4K at the LISA and earning 0.75 on the lot ASAP in the new tax year ?!?

    Any ideas
    • Buckets86
    • By Buckets86 7th Feb 18, 8:01 PM
    • 4 Posts
    • 0 Thanks
    Buckets86
    Hello,


    I am looking to buy somewhere as soon as possible this year, and currently have a Santander HTB ISA and a Nutmeg LISA, opened in April 2017 with the minimum £100.


    There are 2 things I'm unclear about at the moment:


    1. Should I switch my Nutmeg S&S LISA to a Skipton Cash one now? Or is it not worth it for a few months? From what I've read above, this wouldn't 'stop the clock' which started when I opened the Nutmeg LISA. I obviously also need to transfer my HTB ISA in too (by the end of Feb if I switch to Skipton).
    2. When should I start looking seriously/when can I realistically put in an offer on a property? From what I've read, the bonus won't be added until a few weeks after I've had the LISA open for a year, ie. mid/late April.


    Thank you in advance!
    Originally posted by Buckets86

    Following my post above, I noticed on the Skipton website that you can only pay into one Lifetime ISA in each tax year. As I have already paid into the Nutmeg LISA this year (albeit only £100), does this therefore mean that I would have to top it up to the max value (ie. £4,000 less contributions into HTB ISA since 5 April 2017) BEFORE transferring to the Skipton one?


    I obviously want to get this right before I start moving things around, and the Skipton deadline is fast approaching!


    Thank you all in advance :-)
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