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  • FIRST POST
    • makemerich12
    • By makemerich12 12th Jan 19, 8:41 PM
    • 78Posts
    • 14Thanks
    makemerich12
    Isa and lisa? New year new ideas
    • #1
    • 12th Jan 19, 8:41 PM
    Isa and lisa? New year new ideas 12th Jan 19 at 8:41 PM
    Savings wise i'd like to think i'm pretty good i only spend if i badly need to but i'm not smart enough to take a "risk" because i don't fully understand S8S much.

    I'm now working towards planning how much i can save this year and as far as i know i could get a Isa and lisa in the same year? Is this current below are the current accounts i have-

    Isa at 0.75% maxed out
    Bonus Saver at 0.55%
    Reg Sav at 3.0%
    I'd ideally trying to save for a house.
Page 1
    • masonic
    • By masonic 12th Jan 19, 8:58 PM
    • 10,587 Posts
    • 7,975 Thanks
    masonic
    • #2
    • 12th Jan 19, 8:58 PM
    • #2
    • 12th Jan 19, 8:58 PM
    None of those rates are competitive, so you should consider moving the savings you have as well as finding the best place for those you want to make in future.

    You can open a LISA and any other type of ISA and pay into both in the same tax year. Is a cash ISA really saving you any tax? Most people don't exceed the Personal Savings Allowance and non-ISA accounts generally pay higher rates.

    A S&S ISA would be unsuitable if your objective is to buy a house in a few years.
    • ryannnking
    • By ryannnking 12th Jan 19, 11:01 PM
    • 36 Posts
    • 21 Thanks
    ryannnking
    • #3
    • 12th Jan 19, 11:01 PM
    • #3
    • 12th Jan 19, 11:01 PM
    To be honest them rates are that great, but obviously if you're only comfortable with minimal risk and that suits you then thats the best plan of action!

    Although LISA are not considered the best ISA. You effectively get a 25% rate of return, as you invest 4k and then get 1 from the government. Could be something to look into.

    S&S ISA you need to leave the money in and gradually invest for at least 5 years, but 7-10 years is probably better. The longer the better pretty much! So may not be a good idea if you will need a house in the next few years as shares can be volatile.

    Ryan
    • eskbanker
    • By eskbanker 13th Jan 19, 12:04 AM
    • 9,052 Posts
    • 10,469 Thanks
    eskbanker
    • #4
    • 13th Jan 19, 12:04 AM
    • #4
    • 13th Jan 19, 12:04 AM
    Although LISA are not considered the best ISA. You effectively get a 25% rate of return, as you invest 4k and then get 1 from the government.
    Originally posted by ryannnking
    Sounds like another cut that somehow went under the radar, or is this a quote from Diane Abbott?
    • masonic
    • By masonic 13th Jan 19, 8:20 AM
    • 10,587 Posts
    • 7,975 Thanks
    masonic
    • #5
    • 13th Jan 19, 8:20 AM
    • #5
    • 13th Jan 19, 8:20 AM
    Although LISA are not considered the best ISA. You effectively get a 25% rate of return
    Originally posted by ryannnking
    The 25% rate of return assumes you withdraw the money after 1 year. If it is locked in the account for several years the overall rate will be lower, and if the account is used for retirement, the effective rate of return is likely to be around 2% inclusive of interest, based on current rates.
    • makemerich12
    • By makemerich12 13th Jan 19, 4:40 PM
    • 78 Posts
    • 14 Thanks
    makemerich12
    • #6
    • 13th Jan 19, 4:40 PM
    • #6
    • 13th Jan 19, 4:40 PM
    I'd go through the S&S ISA route but wouldn't put more then 1k in as a deposit and would have to work out how much to put in monthly,As for the isa I've maxed out what should i do with that?

    If i just open a new one straight away i'd of maxed it out in one and with the lisa you don't get the money until you retire or buy a house?
    • Alexland
    • By Alexland 13th Jan 19, 7:03 PM
    • 4,181 Posts
    • 3,496 Thanks
    Alexland
    • #7
    • 13th Jan 19, 7:03 PM
    • #7
    • 13th Jan 19, 7:03 PM
    Although LISA are not considered the best ISA.
    Originally posted by ryannnking
    Rubbish, there is no 'best ISA' this is all about suitability for the OPs circumstances.

    In some circumstances a LISA would be the most suitable - and in others completely inappropriate.

    Alex
    • makemerich12
    • By makemerich12 14th Jan 19, 1:18 PM
    • 78 Posts
    • 14 Thanks
    makemerich12
    • #8
    • 14th Jan 19, 1:18 PM
    • #8
    • 14th Jan 19, 1:18 PM
    If i opened a Lisa now and maxed it out(4k) before the tax year ends could i then get another one come April? On top of a new isa
    • kwame41
    • By kwame41 14th Jan 19, 1:44 PM
    • 162 Posts
    • 133 Thanks
    kwame41
    • #9
    • 14th Jan 19, 1:44 PM
    • #9
    • 14th Jan 19, 1:44 PM
    If i opened a Lisa now and maxed it out(4k) before the tax year ends could i then get another one come April? On top of a new isa
    Originally posted by makemerich12
    Yes. But you dont need another one. Just pay another 4000 in the same LISA in the new tax year and keep getting the bonus every year you invest. Until you buy a house or take at retirement.
    • eskbanker
    • By eskbanker 14th Jan 19, 2:15 PM
    • 9,052 Posts
    • 10,469 Thanks
    eskbanker
    If i opened a Lisa now and maxed it out(4k) before the tax year ends could i then get another one come April? On top of a new isa
    Originally posted by makemerich12
    Depends what you mean by your current ISA being 'maxed out' - if this means that you've paid 20K into it this tax year then you can't pay anything into any ISA until the next tax year, when you have a fresh 20K allowance to share across all ISAs.
    • makemerich12
    • By makemerich12 14th Jan 19, 2:24 PM
    • 78 Posts
    • 14 Thanks
    makemerich12
    Depends what you mean by your current ISA being 'maxed out' - if this means that you've paid 20K into it this tax year then you can't pay anything into any ISA until the next tax year, when you have a fresh 20K allowance to share across all ISAs.
    Originally posted by eskbanker
    Yes i mean get a lisa now and max that out, then another in april plus a new Isa as i have maxed the current one out for this year
    • eskbanker
    • By eskbanker 14th Jan 19, 2:37 PM
    • 9,052 Posts
    • 10,469 Thanks
    eskbanker
    Yes i mean get a lisa now and max that out, then another in april plus a new Isa as i have maxed the current one out for this year
    Originally posted by makemerich12
    Still not sure you got my point - if you've maxed out your current ISA for this year, that means (at face value) that you've paid in the full annual allowance of 20K and if that's the case then you can't pay any more into any ISA this tax year, whether it's a LISA or any of the other flavours....
    • makemerich12
    • By makemerich12 15th Jan 19, 1:27 PM
    • 78 Posts
    • 14 Thanks
    makemerich12
    Still not sure you got my point - if you've maxed out your current ISA for this year, that means (at face value) that you've paid in the full annual allowance of 20K and if that's the case then you can't pay any more into any ISA this tax year, whether it's a LISA or any of the other flavours....
    Originally posted by eskbanker
    How does this work then if next year (April) as i understand it i'd be allowed both? I could have a isa and Lisa but wouldn't be allowed to put more then 14k in?
    • kwame41
    • By kwame41 15th Jan 19, 1:35 PM
    • 162 Posts
    • 133 Thanks
    kwame41
    You have a 20K annual allowance for all ISA's.

    Put 4K into a LISA this tax year. Leaving 16K of this years allowance for another ISA.

    Next tax year add another 4K into your existing LISA. Leaving 16K to invest for another ISA.

    Repeat each year until you buy a house / retire for the LISA. Same for the other ISA.
    Last edited by kwame41; Yesterday at 2:20 PM.
    • eskbanker
    • By eskbanker 15th Jan 19, 1:47 PM
    • 9,052 Posts
    • 10,469 Thanks
    eskbanker
    How does this work then if next year (April) as i understand it i'd be allowed both? I could have a isa and Lisa but wouldn't be allowed to put more then 14k in?
    Originally posted by makemerich12
    As kwame41 says (and as I have said previously too), you have an annual 20K allowance in total for ISAs so if you put 4K of that into a LISA then that leaves 16K that you can put into other ISAs.

    You have a 20K annual allowance for all ISA's.

    Put 4K into a LISA this tax year. Leaving 14K of this years allowance for another ISA.

    Next tax year add another 4K into your existing LISA. Leaving 14K to invest for another ISA.

    Repeat each year until you buy a house / retire for the LISA. Same for the other ISA.
    Originally posted by kwame41
    Where is 14K coming from - starting from a 20K annual ISA allowance, if 4K is used for a LISA then that leaves 16K!

    But at the risk of repeating myself, continued references to funding a LISA this tax year are irrelevant if OP has already used their full 20K ISA allowance (unless using the ISA transfer process to shift money from old ISA to LISA).
    • kwame41
    • By kwame41 15th Jan 19, 2:21 PM
    • 162 Posts
    • 133 Thanks
    kwame41
    As kwame41 says (and as I have said previously too), you have an annual 20K allowance in total for ISAs so if you put 4K of that into a LISA then that leaves 16K that you can put into other ISAs.

    Where is 14K coming from - starting from a 20K annual ISA allowance, if 4K is used for a LISA then that leaves 16K!

    But at the risk of repeating myself, continued references to funding a LISA this tax year are irrelevant if OP has already used their full 20K ISA allowance (unless using the ISA transfer process to shift money from old ISA to LISA).
    Originally posted by eskbanker

    Just realised and corrected my mistake.
    • Alexland
    • By Alexland 15th Jan 19, 2:32 PM
    • 4,181 Posts
    • 3,496 Thanks
    Alexland
    Repeat each year until you buy a house / retire for the LISA.
    Originally posted by kwame41
    You can only contribute to the LISA until you are age 50.

    Alex
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