Lifetime ISA

Hilly1990
Hilly1990 Posts: 23 Forumite
First Anniversary
in Savings & investments
I currently hold a Lifetime Isa with Skipton Building Society and have put £4000 in a few months ago which I believe will give me the government bonus of £1000.

To receive the bonus for the next tax year 2019, am I able to pay an additional £4000 in around February time or would this have to be spread throughout the year?
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Comments

  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
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    Hilly1990 wrote: »
    I currently hold a Lifetime Isa with Skipton Building Society and have put £4000 in a few months ago which I believe will give me the government bonus of £1000.

    To receive the bonus for the next tax year 2019, am I able to pay an additional £4000 in around February time or would this have to be spread throughout the year?
    You can pay it in whenever you like in as many seperate lumps as you like up to £4000 total; as long as your payment(s) don't go in before 6 Apr 2018 and don't clear after 5 April 2019 they will count as 2018/19 tax year subscription.
  • ValiantSon
    ValiantSon Posts: 2,586 Forumite
    Hilly1990 wrote: »
    I currently hold a Lifetime Isa with Skipton Building Society and have put £4000 in a few months ago which I believe will give me the government bonus of £1000.

    To receive the bonus for the next tax year 2019, am I able to pay an additional £4000 in around February time or would this have to be spread throughout the year?

    I agree with everything bowlhead99 has said. I'd only add that given the interest rate is so low on the cash LISA you might as well wait until the start of April (rather than in February) to pay the £4,000 in and benefit from a better interest rate elsewhere. The extra won't be a huge sum, but it is better than not getting it.
  • sully1311
    sully1311 Posts: 380 Forumite
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    Yep, I opened up 2 Lifetime ISAs in January and put the max in straight away. I have the max again for the next financial year but they're currently in various easy access and regular savings account getting better interest for a year before they are put into the Lifetime ISA next year March sometime.

    The best option is just to put your money in a better interest account for the year and then depositing it in the Lifetime ISA before the end of the next tax year in 2019.
  • ValiantSon
    ValiantSon Posts: 2,586 Forumite
    edited 3 March 2018 at 5:19PM
    sully1311 wrote: »
    Yep, I opened up 2 Lifetime ISAs in January and put the max in straight away. I have the max again for the next financial year but they're currently in various easy access and regular savings account getting better interest for a year before they are put into the Lifetime ISA next year March sometime.

    I hope that this is a typing error. You can only subscribe to one LISA in any tax year. If you have opened two in January and paid into two this year then you are in breach of the rules and HMRC will be in touch.
  • Ak92
    Ak92 Posts: 36 Forumite
    So if I use my LISA to buy my first home, will I still be able to use the account to save for my retirement and still get the government bonus?
  • ValiantSon
    ValiantSon Posts: 2,586 Forumite
    Ak92 wrote: »
    So if I use my LISA to buy my first home, will I still be able to use the account to save for my retirement and still get the government bonus?

    Yes. You can use it for both purposes.
  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
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    Ak92 wrote: »
    So if I use my LISA to buy my first home, will I still be able to use the account to save for my retirement and still get the government bonus?

    Yes, as long as when you take the money out of your LISA to buy the home you don't close it, but keep it going with a few pounds in, you can carry on using it.

    If you're still under 40 at that point you could just open up another one of course. But if you'll be over 40 you won't be eligible to open up another one (other than by transfer) so you would need to keep the first one running after taking out your property money.
  • k12479
    k12479 Posts: 716 Forumite
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    ValiantSon wrote: »
    ...you might as well wait until the start of April (rather than in February) to pay the £4,000 in and benefit from a better interest rate elsewhere.
    It's worth remembering that this tax year the bonus is paid at the end while from the next tax year the bonus is paid monthly. That's still unlikely to change the validity of the advice above though.
  • Hilly1990
    Hilly1990 Posts: 23 Forumite
    First Anniversary
    k12479 wrote: »
    It's worth remembering that this tax year the bonus is paid at the end while from the next tax year the bonus is paid monthly. That's still unlikely to change the validity of the advice above though.

    If that's the case, would I need to put the whole £4000 in at the beginning of the year to benefit from the full £1000 bonus?
  • Alexland
    Alexland Posts: 9,653 Forumite
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    No you can put the money anytime during the tax year. If you put it in earlier you get the bonus paid earlier.
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