Can we talk about LISAs (Lifetime ISAs)?


#1

I am looking to buy my first property soon within the next year or two.

What’s everyone’s experiences of the Skipton cash LISA?

I’m weighing up the pros and cons of opening the Skipton LISA or a stocks and shares LISA.

I don’t know anyone that has any experience of either really, so I want to open this up to discussion and am interested in knowing how easy it is to open and manage (I believe it’s all done online).

My understanding is that it can be opened with £1 but are there limitations on how many transfers into the account you can make with the total per year being 4K? Ie. Can I put in £50 one month and then £2000 the next? Or does it have to be set amounts each month?


(James) #2

I have a lifetime ISA with Skipton and would so far recommend it. However, as you plan to buy so soon I’m not sure if its worth the hastle using it to buy a house. You’re probably better off opening is and using it to save up for retirement. Just be aware that it is in no way a replacement to a pension.

The only real downside of a cash LISA is that Skipton has no competition from other financial institutions, so the interest rate on top of the government bonus isn’t brilliant.

You can pay in separate payments in one financial year if you need to, but not anything over a total of £4000.

I got most of my information from MSE when I was researching the options. There is plenty of reliable advice there.


#3

Thank you. I have my work base pension, which is very good and wouldn’t use the Skipton towards retirement as you take a 6% hit on the savings.

My thinking is if I open the Skipton LISA and put 4K in the government will add the 1k so pretty much money for nothing.

I’ve heard there is going to be another bank opening the cash LISA Sometime this year, but as yet haven’t heard much else. 1% isnt anything really but the 25% bonus that can be used towards the deposit or house itself is very appealing.

There’s no app for Skipton, so how easy is it to transfer money in?


#4

I also have a Skipton LISA. Applying for it was a doddle and their online dashboard to manage it is very good in my opinion; it’s modern, streamlined and easy on the eye. I know there’s a variety of ways to fund it and it gives you this information clearly. I usually do a bank transfer which I personally find is the quickest. All you need to do is set it up in your bank as a payee using the sort code, account number and unique reference number and you can easily transfer money into it as often as you like or set up a standing order.
Hope this helps.


#5

Thank you. Do you know what happens if you try to put more than 4K into it within the year?


#6

I have no idea tbh, and have wondered this myself. I’m not sure if it physically won’t let you or that when you come to buy your first house and use it as a deposit, the government bonus gets subtracted because you’ve technically broken your agreement not to do it? Suppose it’ll have to be a Google search.


(Dan) #7

I actually asked this question of Skipton - and was told that it will reject any funds which are above the £4k limit :man_shrugging:t2:


(Stuart Leader) #8

Your payment gets returned to your originating account (speaking from experience with my Skipton ISA).


(Tom Halloran) #9

You might be thinking of this one from Nottingham, announced a couple of weeks ago: https://www.moneysavingexpert.com/news/2018/08/second-cash-lifetime-isa-to-launch-next-week/. Doesn’t seem to offer any particular benefits over Skipton, but good to have some more competition out there

Difficult for anyone to give you financial advice on this, but simply put the stocks and shares one is higher risk / higher reward - you may earn a better return, say 3-5% or more, but there is the risk that markets turn sour and you lose some of your investment. Generally speaking the longer your timeframe the stronger the argument for stocks and shares, as markets will recover with time


(Nathan) #10

Also currently looking into opening a Cash LISA. Are there any other decent providers that dont charge a fee?

As far as I could see Skipton were the only one that didnt :slight_smile:


(Sacha) #11

I would recommend the lowest risk “stocks and shares” LISA from Nutmeg. My fiancee and I have been putting the £4k maximum’s in. It’s mainly government bonds (think it’s made about 1.5% but we’re really only using it for the £1k bonuses).

By the time we buy we’d hope to have £6k of bonus; every little helps (particularly in the London market :roll_eyes: )


(Nathan) #12

From the nutmeg website…
“0.75% Nutmeg fee, 0.21% average investment fund cost”

Surely that just makes your interest rate pointless?


#13

Thank you


#14

Yes that’s the one Nottingham.


(Sacha) #15

To be fair, the return has also been rather irrelevant to us given we’re only using it for the bonuses. We appreciate being able to track it online and through the mobile app.


#16

I have one of these and like you say its free money, I just plan on putting as much into it as soon as possible, even if I buy next year its still a free £1000 and the interested rate of 1% is still better that 90% of savings accounts I’ve seen around lately.

Unless you’re looking to buy in at a minimum 5 years time I wouldnt go with the stocks and shares option, but thats down to how comfortable you are with that risk.

I’m going with a consistent amount added per month, but I know you could just add the 4K straight off the bat and let it sit there until April, then you can add another 4K. and so on until you want to use it.

Hope this helps!


#18

All set up. Very quick and painless :+1:t2:


(Adam Kendrew) #19

Me and my other half are close to exchanging and will be using our Lifetime ISA with Skipton for our deposit. We actually transferred our Help to Buy (HTB) to the Lifetime as it meant we could put varying amounts in each month and wasn’t capped at £200 like the HTB. We have gained around £3k each in bonuses.

The only issue, which has been mentioned is that if you’re planning on buying within the next year it wouldn’t work, as the account needs to be open for a year before you can withdraw for your home (without being penalised). We had to push back our exchange slightly, as her account doesn’t mature until the end of Sept! :smiley:


#20

Thanks for that. We’ve only loosely said within the next year, I will see how we get on and if needs be transfer 4K at the last minute into the Skipton to be used, otherwise I’ve only lost a quid :wink:


(Ben) #21

My and my SO have both opened Skipton LISA’s in the last month.

We’ve got the view that we might be looking at buying in 2 years time, and almost certainly will within 5. The bonus could turn a (2-year, 2 person) max £16k into £20k, which is great.

If you’re definitely going to buy in under 1 year, then it can’t be used, but if you can at least hit the 1 year account-maturation date, you are set.

I believe you could also put in the £4k right at the end of the first year if neccesary.

Also, opening the account couldn’t have been easier - just make sure you make a note of the relevant user names, etc. I had a bit of an issue trying to pay in via card, on their online form, but transfer from Monzo app was fine.