Soldato
The yeah, shift it over once the ISA opens (assuming you've not hit your isa limit or need it for something else)
Best savings account?
- Thread starter Merlin5
- Start date
Does HTB: ISA count? (have never opened an ISA other than that, just been using saving accounts)
HTB ISA's are just classed as a cash ISA and they do count towards your £20k ISA annual limit.
Up to now you could only have 1 cash ISA per year (with some slight exceptions) but now the rules have changed for this tax year and you can have multiple cash ISA's - though you still have to stay under the £20K annual limit.
Transfers from one ISA into another don't count towards your annual limit/
Soldato
It counts but with the £200pm limit, you've got £17600 of your allowance left.
You're probably one of the few left with an H2B ISA
Soldato
LISA worth bothering with if not using for a house purchase?
As far as I can tell I can essentially add a stocks and shares type account with it, but the gov tops up a max of £1K per year for free (if you deposit £4K), so it's a 25% bonus on cash put in.
Negatives seem to be:
As far as I can tell I can essentially add a stocks and shares type account with it, but the gov tops up a max of £1K per year for free (if you deposit £4K), so it's a 25% bonus on cash put in.
Negatives seem to be:
- You can't open one unless you're under 40 years old.
- No point paying in after you're 50 as the gov stops matching it.
- Not everywhere offers them, so fees could be higher than normal stocks and shares ISA elsewhere long term (less competition).
- Another plate to spin.
- Can't withdraw the money until retirement unless you want to eat the 25% penalty.
- Shares ISA allowance with other ISA account types.
I thought if you had a SIPP the SIPP is better due to getting 40pc tax rebate on it?
Obviously you'll get taxed on SIPP at basic rate during drawdown.So it's basically evens there?
But LISA can only be extracted at 60 years old?
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Soldato
You have to consider when you can access etc.
SIPPs are great but you should really keep some liquidity in your assets
Soldato
For LISA one thing worth considering is that the money isn't protected from things like means testing or bankruptcy proceedings.
So it could in theory work against you for certain other things later.
Hard to say if worth the risk of putting too much into it vs basic stocks and shares ISA or SIPP.
Agree with MKW you'll generally want some liquidity available.
So it could in theory work against you for certain other things later.
Hard to say if worth the risk of putting too much into it vs basic stocks and shares ISA or SIPP.
Agree with MKW you'll generally want some liquidity available.
But LISA isn't really liquid right? If you do take it out you get that penalty.
Not sure if any Lisa's are available on decent S&S platforms?
I used one for house purchase and it got me 4-5k extra.
Think it still has a pound in it
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Soldato
The penalty is just the removal of the bonus which basically knocks it back to the same position as a normal ISA.
(Bar it having different fees potenitally as there is less competition).
Don
How does that actually work? Say I cash out a LISA, do I pay back the £1000 only but keep the gains on it?
25% of the amount you take out. You'll end up worse off taking anything out of a LISA and paying the penalty. The only exception really being if you've made significant losses in an S&S lisa on your investments, and they'd need to be significant given the 25% top up.
Soldato
ISA (S&S or Cash), SIPP, Premium Bonds are the main 3 I am aware of.
What others are there?
Soldato
Actually its worse.
Good summary here
Top Lifetime ISAs
Martin Lewis' guide to the Lifetime ISA which allows 18-39yr olds to save for retirement or a first home and get a 25% bonus.
www.moneysavingexpert.com
Soldato
Bonds and eg S&S upto capital gains allowance
Yes the probably once in a lifetime quirk of ultra low coupon gilts followed by a rapid rise in rates coinciding with a suicidal PM crashing things further is probably over but you can still lock in a respectable yield on gilts.
I still can't quite see the use case of a LISA vs an S&S isa or a SIPP.
Maybe if LISA had loads of providers.
I guess it might be better for people on lower tax rate?
Ie you get about similar relief on pension as LISA.
and at retirement you don't have to worry about income tax on it. That's the only real user case I can see
Maybe if LISA had loads of providers.
I guess it might be better for people on lower tax rate?
Ie you get about similar relief on pension as LISA.
and at retirement you don't have to worry about income tax on it. That's the only real user case I can see
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Soldato
Yeah that is my take as well, but like I said there are some drawbacks vs pension, and the big one is that it's not protected like a pension.
It can be used against your for any means testing, or whatever as well.
Personally am not a big fan of the idea, free money is nice but SIPP seems to offer a similar uplift, and if you're savvy with how you use it later, you won't pay a lot of tax if you keep under the higher limits.