Lifetime ISA

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Soldato
Joined
31 May 2009
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The government last year announced new versions of the ISA, a lifetime ISA, which was meant to be either a package for first time buyers, or savings towards retirement. The idea was you save, and for each year of investment, it gets topped up by 25%. The money can only be accessed when purchasing a house, or when one reaches 60 without incurring considerable penalties.
One must be under 40 when one starts the LISA, and after 50 you can't add to it.

For a number of reasons I might be interested in such a product for my wife, too old to take one out myself, but what I am finding strange is that virtually no one is planning to offer them. There are a massive 3 stocks and shares versions to pick from, and zero cash types to pick from currently, unless my research is inaccurate.

I thought all the major providers would just offer them as stand beside their normal cash ISA, with a similar pathetic rate, but they don't even seem interested in doing similar.
In theory these products are meant to launch in 3 weeks.
Anyone aware of cash type LISAs?
 
Looked into it as an option for me, decided to pay more into my pension instead as I'm on 40% tax, me and my partner did use Help to Buy ISA's to buy our house at the end of last year which was a welcome bonus.
 
Mucky_Pup said:
Looked into it as an option for me, decided to pay more into my pension instead as I'm on 40% tax, me and my partner did use Help to Buy ISA's to buy our house at the end of last year which was a welcome bonus.
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You made the right choice.

LISA's for pensions aren't really that good, the big benefit is for first time buyers.

Martin 'Moneysavingexpert' Lewis did indicate that banks didn't seem to want to offer the 'LISA' at first. Slightly annoying as it's 12 months from opening before you can actually use the bonus so if they don't launch them for another 6 months that would be even longer you have to wait.

Got my help to buy ISA but the limit of 250k (other than London) is pretty rubbish for the south east where I live.
 
The financial regulator has a number of concerns over the Lifetime ISA, and providers are concerned that this will be a significant future misbuying scandal when the regulatory goalposts are inevitably shifted in a few years.

A few more will come forward over the next couple of years, but most don't want anything to do with it.
 
Sorry it's a DM article but i read this the other day; http://www.thisismoney.co.uk/money/saving/article-4268846/Why-NO-bank-offer-Lifetime-Isa.html

Sounds like it may be too good to be true. I mean giving people a 25% bonus to prop up the property market is pretty hilarious.

I live in London and will open one as soon as i can, but the reality is by the time i get a deposit i doubt you could buy anything in or near London for under £450k :( (In a nice area anyway)

The good news is you can have the LISA and pay the rest of your ISA allowance into a regular cash ISA at the same time.
 
With the LISA once you buy a house and use the 25% bonus, are you excluded from saving towards the pension bonus?

Seems utterly daft saving for a year to use a £1000 bonus on a house, and forfeiting the max £32K bonus potentially on offer with the pension (IF you open it at 18).
 
norm said:
With the LISA once you buy a house and use the 25% bonus, are you excluded from saving towards the pension bonus?

Seems utterly daft saving for a year to use a £1000 bonus on a house, and forfeiting the max £32K bonus potentially on offer with the pension (IF you open it at 18).
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I believe you can use part of your LISA to buy your first house, but then keep the LISA going and keep paying into it until you reach 50 to give you a pension payout (after you reach 60?).

Still annoyed that LISA allows £4k to be invested per year, while HTBISA is limited to £2.4k per year in £200 monthly instalments. I don't understand why they decided to prohibit people over 40 from opening a LISA, especially if they have never owned a home.
 
Can you pay in to a lifetime ISA and h2b ISA (me personally) and use them both as a bonus at the end on a house? Basically i started a help to buy ISA last April and have a years worth in there maxed.

I am looking to move in. To a property by end of year hopefully so i am not sure if i would really benefit from a Lifetime ISA now.

I could still open it and use it though. Or could i have the bonus from both ? Unlikely i guess
 
You will not benefit from a lifetime isa as far as a purchase this year goes, as it must be in place for 1 year.
Don't consider it for a purchase this soon, nor would it be good to use a stocks and share one, as with initial setup and the fees attached to such wrappers, they'll hurt for a year or too until they recover above initial levels.
 
It's a scam. If you pay into a pension it goes in tax free. If you pay into a lifetime ISA you pay in taxed income and get a bonus at the end of it, which coincidentally is equal to the tax you paid previously, as that's how the rates work out. So a lifetime ISA is basically a way of lending the government money.
 
Vonhelmet has a good point though, if your in the 40% tax slot you'd be much better loading into you pension for retirement, as a first time buyer it would probably be a good deal as long as you knew you were going to buy a house at the end of it.
I know people you have been saving for their first home for nearly 15 years and then ended up moving in with their new partner 6 months after they meet.
 
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