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  • FIRST POST
    • daver9
    • By daver9 5th Feb 18, 3:04 PM
    • 6Posts
    • 3Thanks
    daver9
    Lifetime ISA penalty before bonus?
    • #1
    • 5th Feb 18, 3:04 PM
    Lifetime ISA penalty before bonus? 5th Feb 18 at 3:04 PM
    I have a lifetime ISA that I opened in June 2017 and was patiently waiting until June this year so I could get my bonus and use it towards the deposit on a house. This week a house came on the market that is just right for me & my family and I'm tempted to jump on it but in order to pay the deposit I will need to use the money in my LISA. I know I won't have any bonus but will I be penalised the 25% as well? There is currently 5800 in there (1800 transferred in from a previous HTBISA plus 4000 of this years contribution), will I just be able to withdraw it all?
Page 1
    • Ed-1
    • By Ed-1 5th Feb 18, 3:48 PM
    • 2,203 Posts
    • 1,176 Thanks
    Ed-1
    • #2
    • 5th Feb 18, 3:48 PM
    • #2
    • 5th Feb 18, 3:48 PM
    I have a lifetime ISA that I opened in June 2017 and was patiently waiting until June this year so I could get my bonus and use it towards the deposit on a house. This week a house came on the market that is just right for me & my family and I'm tempted to jump on it but in order to pay the deposit I will need to use the money in my LISA. I know I won't have any bonus but will I be penalised the 25% as well? There is currently 5800 in there (1800 transferred in from a previous HTBISA plus 4000 of this years contribution), will I just be able to withdraw it all?
    Originally posted by daver9
    Up until 5th April 2018 there are no penalties for withdrawal (because the first bonuses aren't being paid until after then).
    • Alexland
    • By Alexland 5th Feb 18, 4:06 PM
    • 2,388 Posts
    • 1,789 Thanks
    Alexland
    • #3
    • 5th Feb 18, 4:06 PM
    • #3
    • 5th Feb 18, 4:06 PM
    Yes you can withdraw it now without penalty if you act before 5th April.

    However if the purchase falls through you might regret withdrawing it - so do the viewing, make the offer and start the process before withdrawing it but keep the above deadline in mind.

    Are you sure the seller will require an exchange deposit? We have bought 4 properties over the years and never had to give an exchange deposit as we have always exchanged and completed on the same day (after between 3 to 6 months of conveyancing). Also worth understanding the seller's circumstances as some are not ready to move immediately and it might be a surprise to get an offer so quickly.
    Last edited by Alexland; 05-02-2018 at 4:34 PM.
    • daver9
    • By daver9 5th Feb 18, 4:17 PM
    • 6 Posts
    • 3 Thanks
    daver9
    • #4
    • 5th Feb 18, 4:17 PM
    • #4
    • 5th Feb 18, 4:17 PM
    That give me hope Alexland!
    The extra deposit boost would be very handy
    • thenewcomer
    • By thenewcomer 6th Feb 18, 1:12 AM
    • 93 Posts
    • 20 Thanks
    thenewcomer
    • #5
    • 6th Feb 18, 1:12 AM
    • #5
    • 6th Feb 18, 1:12 AM
    this is why i have been holding off full LISA contribution until just before the new tax year start.
    • eskbanker
    • By eskbanker 6th Feb 18, 8:54 AM
    • 7,140 Posts
    • 7,577 Thanks
    eskbanker
    • #6
    • 6th Feb 18, 8:54 AM
    • #6
    • 6th Feb 18, 8:54 AM
    this is why i have been holding off full LISA contribution until just before the new tax year start.
    Originally posted by thenewcomer
    ....which has been the usual recommendation on here from day one, albeit primarily from the perspective of maximising interest (not difficult to beat Skipton's paltry 0.75% (previously 0.5%)) rather than avoiding early withdrawal penalties.
    • epm-84
    • By epm-84 6th Feb 18, 9:54 AM
    • 1,373 Posts
    • 4,331 Thanks
    epm-84
    • #7
    • 6th Feb 18, 9:54 AM
    • #7
    • 6th Feb 18, 9:54 AM
    Don't forget if you've got the Skipton account and another Help2Buy ISA you must submit your transfer request for the Help2Buy funds to transfer by 1st March for them to guarantee to make the transfer in this tax year. If you miss the deadline you'll only be able to transfer up to 4000 and it'll count as your 18/19 Lifetime ISA allowance. They've sent out a few emails informing customers of this but Martin Lewis doesn't seem to be aware, I've tried tweeting him but they've gone unnoticed.
    Last edited by epm-84; 06-02-2018 at 9:56 AM.
    • eskbanker
    • By eskbanker 6th Feb 18, 1:07 PM
    • 7,140 Posts
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    eskbanker
    • #8
    • 6th Feb 18, 1:07 PM
    • #8
    • 6th Feb 18, 1:07 PM
    Don't forget if you've got the Skipton account and another Help2Buy ISA you must submit your transfer request for the Help2Buy funds to transfer by 1st March for them to guarantee to make the transfer in this tax year. If you miss the deadline you'll only be able to transfer up to 4000 and it'll count as your 18/19 Lifetime ISA allowance. They've sent out a few emails informing customers of this but Martin Lewis doesn't seem to be aware, I've tried tweeting him but they've gone unnoticed.
    Originally posted by epm-84
    The Skipton transfer deadline is covered in the most logical and obvious place, namely at https://www.moneysavingexpert.com/savings/lifetime-ISAs#skipton:
    if you're transferring a higher-paying Help to Buy ISA in, you may want to wait until later in the tax year to transfer so you max the interest you can get though you need to apply to transfer by 1 Mar 2018 for this tax year
    • Alexland
    • By Alexland 6th Feb 18, 1:28 PM
    • 2,388 Posts
    • 1,789 Thanks
    Alexland
    • #9
    • 6th Feb 18, 1:28 PM
    • #9
    • 6th Feb 18, 1:28 PM
    You are right, Martin couldn't possibly know this without reading your tweets.
    • Kim_13
    • By Kim_13 6th Feb 18, 1:46 PM
    • 1,901 Posts
    • 2,035 Thanks
    Kim_13
    Don't forget if you've got the Skipton account and another Help2Buy ISA you must submit your transfer request for the Help2Buy funds to transfer by 1st March for them to guarantee to make the transfer in this tax year. If you miss the deadline you'll only be able to transfer up to 4000 and it'll count as your 18/19 Lifetime ISA allowance. They've sent out a few emails informing customers of this but Martin Lewis doesn't seem to be aware, I've tried tweeting him but they've gone unnoticed.
    Originally posted by epm-84
    The OP has already transferred in their HTB, so this deadline doesn't affect the OP.

    As Alexland has said, the 18/19 allowance would be eaten up if the money were withdrawn without penalty in this tax year and put back in in 18/19 because it wasn't needed yet, hence advising not to withdraw until the home buying plans are confirmed.
    Sealed Pot 11 #520 ~ /100
    VSP 2018 #9 ~ 19.55/180.00
    CCCC 2018 #1 ~ 20.75/180.00
    • epm-84
    • By epm-84 6th Feb 18, 2:29 PM
    • 1,373 Posts
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    epm-84
    You are right, Martin couldn't possibly know this without reading your tweets.
    Originally posted by Alexland
    The MSE weekly email went out saying Skipton could choose to impose a 1st March deadline but they haven't yet on two occasions after Skipton had emailed members saying they have imposed the 1st March deadline, so Martin and his team did miss it originally but as the ISA page has been updated now they've caught up.
    • eskbanker
    • By eskbanker 6th Feb 18, 7:12 PM
    • 7,140 Posts
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    eskbanker
    The MSE weekly email went out saying Skipton could choose to impose a 1st March deadline but they haven't
    Originally posted by epm-84
    I don't recall this, do you have a link?

    It was highlighted at launch last June that Skipton could choose to stop accepting HTB transfers (a right which they haven't exercised) and then it was separately observed in November that they'd introduced their March HTB transfer deadline for 2017/18 (which has been published on their website since then) but I have no recollection of any emails along the lines you suggest, so if you could identify where you found that it may help clarify the confusion?
    • epm-84
    • By epm-84 7th Feb 18, 2:46 PM
    • 1,373 Posts
    • 4,331 Thanks
    epm-84
    I don't recall this, do you have a link?

    It was highlighted at launch last June that Skipton could choose to stop accepting HTB transfers (a right which they haven't exercised) and then it was separately observed in November that they'd introduced their March HTB transfer deadline for 2017/18 (which has been published on their website since then) but I have no recollection of any emails along the lines you suggest, so if you could identify where you found that it may help clarify the confusion?
    Originally posted by eskbanker
    The Skipton transfer deadline is covered in the most logical and obvious place, namely at https://www.moneysavingexpert.com/savings/lifetime-ISAs#skipton:
    Originally posted by eskbanker
    Just checked and it was a link from the email which took you directly to the heading "Skipton The First (and only) Cash LISA" on the same page you've linked to where is STILL says underneath

    One small warning: Skipton has a T&C which allows it to stop accepting transfers in. By setting the 1 Mar deadline, it hopes not to have to activate it, but if too many people transfer at one time, it could stop them to allow it to give good customer service to all. So, if you're transferring your Help to Buy ISA in, it may pay to transfer earlier rather than later.
    Obviously my memory is better than your ability to read all the information on a page you've linked to.
    • bobobski
    • By bobobski 7th Feb 18, 3:19 PM
    • 705 Posts
    • 1,620 Thanks
    bobobski
    More to the point, Skipton customers have been contacted directly by Skipton about the deadline and the steps they need to take to effect the transfer, so arguably people shouldn't be waiting for Martin to tell them what to do when the bank itself has told them what to do. Irrelevant since he has but, y'know, taking responsibility for yourself etc...
    #8: Save 12k in 2018: 2,758.01 / 14,000 (19.70%) | #18: Save 12k in 2017: 12,078.82 / 12,000 (100.65%) | #86: Save 12k in 2016: 8,476.09 / 10,000 (84.76%)
    House deposit by 31/12/2020: 24,349.25
    / 60,000 (40.58%) | Emergency fund by 31/12/2020: 2,230 / 5,000 (44.60%)
    • Alexland
    • By Alexland 7th Feb 18, 9:50 PM
    • 2,388 Posts
    • 1,789 Thanks
    Alexland
    Yup and even for new customers there's a bit of text in bold making this clear.

    https://www.skipton.co.uk/savings/isas/lifetime-isa/transfers
    • eskbanker
    • By eskbanker 8th Feb 18, 12:46 AM
    • 7,140 Posts
    • 7,577 Thanks
    eskbanker
    Just checked and it was a link from the email which took you directly to the heading "Skipton The First (and only) Cash LISA" on the same page you've linked to where is STILL says underneath

    One small warning: Skipton has a T&C which allows it to stop accepting transfers in. By setting the 1 Mar deadline, it hopes not to have to activate it, but if too many people transfer at one time, it could stop them to allow it to give good customer service to all. So, if you're transferring your Help to Buy ISA in, it may pay to transfer earlier rather than later.
    Obviously my memory is better than your ability to read all the information on a page you've linked to.
    Originally posted by epm-84
    I still think you're confusing what's actually being said there! The text you've quoted is saying that by setting a deadline they hope not to have to activate their clause allowing them to stop accepting transfers, which isn't the same thing as "[The MSE weekly email went out saying] Skipton could choose to impose a 1st March deadline but they haven't" - they have imposed the deadline (for getting transfers done this tax year, with its more generous allowance) but haven't said they'll stop accepting transfers, although any initiated after that deadline won't be completed this tax year.

    So there's no need to be tweeting Martin Lewis, because MSE are already publishing the same key facts as Skipton here....
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