Is it lifetime cash lsa to save for deposit trustworthy! I want to say when you want to take your money out is the solicitor asking for loads of things to prove?
I should add that getting a Lifetime ISA might be a pretty bad idea if you're thinking of moving abroad down the line. While technically you can keep your Lifetime ISA (just like any ISA) while living abroad provided you don't contribute to it during your absence from the UK, it seems that most Lifetime ISA providers actually opt to close and liquidate your LISA if you stop being a UK resident. (I suspect they just want to save themselves performing the due diligence that you're paying any taxes you owe abroad etc.) This will obviously count as unauthorised withdrawal from your account so you'll get hit by that sweet 25% penalty - and that just because you decided to move to Spain or sth. Also, down the line it's not unthinkable that the Treasury might decide to impose some withdrawal charge on the LISA balance if you decide to retire abroad, even if you're following all the rules and only accessing it after the age of 60. After all that 25% bonus came from UK taxpayers money so the Treasury might not be comfortable with it leaking into some other economy.
What if you invest money and move the funds to buy a house and liquidate it and then sell the house or mortgage and then take the cash abroad?? Am i missing something?
I suppose that theoretically would work but to my understanding, when buying a house, its directly done from LISA to solicitors (or so). Which might prompt you to check the fine print of the contracts. Its possible (i honestly dont know) that the gov will still take their money if you sell the house within certain period. Or they prevent you from selling it or using it commercially for a period of time. You must do your due diligence.
Other reasons to invest in to a Liftime ISA is if you are already contributing the full annual allowance to your pension or if you are at risk of breaching the pension lifetime allowance. It can also be part of an early retirement strategy to supplement income until you can draw your state pension.
No doubts , A good way of growing and saving your money is through investing . You don't need to have much before you can invest. "That little money you have now can make you millions if you invest it wisely". I wasnt financial free until my 40’s and I’m still in my 40’s, bought my second house already, earn on a monthly through passive income and got 4 out of 5 goals, just hope it encourages someone that it doesn’t matter if you don’t have any of them right now, you can start TODAY regardless your age INVEST and change your future! Investing is a grand choice I made
Great video really well explained!! Any advice for someone who wants to build there 1st home? I already have a first to buy isa but I've now decided to build.
I don't consider LISA same as standard rate pension. who knows what will happen with personal allowance in 20 or 30 years but as it stands state pension would cover it and you would get taxed 15% at least (20% * 0.75) while LISA would be 0%. Salary sacrifice would make the difference smaller though. It does make sense to salary sacrifice the higher tax part of the salary.
Problem with pensions are these questions, what is the likelihood of reaching retirement age? How long are do you expect to live to enjoy the pension? Now the age is 68 but could rise to 70. Take your 25% tax free but this hits the retirement pension payments by around 28% annual decrease. The 75% than remains you are drip fed so in order to realise all returns you must survive 12 years taking you to 80! For me unlikely to make it to retirement age.
Great video!!! I was going to plow £20k into a stocks and shares ISA next year but now I will definitely be putting £4k in a LISA then probably invest in something very safe like S&P 500 then forget about it until I’m 60! Thanks so much for this info!! Just wish the allowance would go up!
Thank you! This is very informative. Will there be any conflict if My partner and I open different LISA for one property we gonna buy. I mean like, is there any one to one rule between LISA and the property?
Friend of mine just told me about this. I been looking at investing my money and he said he opened one of these, I'm 38 this year so I'm close to not being able to open one of these. Going by your video I get the feeling you think it's better just to put the extra money directly into the pension rather than using a LISA. I know this video was 3 years ago so maybe worth doing a updated video on this?
Great video, it seems that gov in the UK can chop and change whatever tax they take whenever based on markets, crises etc... Even the withdrawal age can change on these 'instruments' (has happened in the past). Just like any pension type investment augmented (and controlled) by the gov. Nothing is for sure with these funds, you can lose capital left right an centre and rules can change at the drop of a hat! 😮
Hypothetically.... my wife and I saved £30,000 in our LISA with hope of buying our first property worth £300,000 but eventually we bought a £250,000 home and put down a 10% which amounts to £25,000. My question is can we access the balance of £5000 at retirement?
Can you have a pension and a lifetime ISA? Both myself and my partner work full time and receive a pension from our employer. Also are you saying that if me and my partner have two separate ISAs we can use both of our bonuses on a first home?
Can you answer this question.? If you can withdraw a Lisa at 60 tax free then can you then roll that into a personal pension using max limits,ie all of salary,for the next five years.Would this then attract tax relief?- and why has no one ever asked this question before?
Can anyone help me, I'm thinking of opening an LISA, I have owned a house many years ago and im currently renting. Am I allowed to have a LISA if im not a 1st time buyer?
Hello, For the 1st property purchase. I would love to get the Lifetime ISA for that purpose.. But I have heard that you can only use the lifetime ISA on a first-time property if you're buying a new build? That not just any property (under that sum gap) as your first-time property?
I just feel like if you're saving for retirement over say 20 years and the interest rate is 4 percent then inflation at 7 percent will eat away at the 25 percent bonus you get?
How does the 25% government bonus work year on year? Say I put £4000 into the account in tax year 1; when this ticks over into the second tax year the government top it up with 25%, so £1000. That's now £5000. If I then make no additional payments into the account in tax year 2, at the end of that second tax year does the government top it up with 25% of the new balance, i.e. 25% of £5,000 (£1,250) or is it still 25% of that original money I paid in, i.e. 25% of £4,000 (£1,000)? Hope this makes sense!
Thank you for your explanation, it is very informative. But I still have two questions: 1) Is the dividend payout from LISA perpetual? Or until 60? 2) Can I reinvest the interest in a LISA account? If yes, does it count for the 4,000 pounds annual allowance?
Lets say I have decided to withdraw funds from my LISA torwards a deposit for a house, can i continue contributing into it afterwards for retirement? Or once you cash out that’s it?
Greetings! In the scenario of buying a 1st home, is it limited to buying it in the UK? Or can I withdraw the money for a 1st home outside the UK? Thanks in advance!
Thank you so much for this video, so so informative! I was wondering if you open a cash LISA and then decide 5 years down the line you want a stock and shares LISA, can you transfer what you already have into a stock and shares LISA?
No you can't. LISA is for either first time home buying or retirement. Not transferable to stocks and shares because that way you can withdraw it into a liquid cash.
Hi Andy, if open the ISA life saving account this may 2024, and put a sum of £4000 , which month in 2025 can I put another £4000 to qualify for two bonuses on £8000 in two financial year ,less than 2years. Thanks
So I have 12k in my help to buy, thinking of swapping to a lisa, so I should transfer help to buy account too a normal account, close the help to buy, then transfer 4k every year into the lisa? This is more for retirement and long term
Does the interest compound? For example, if you put £4000 in the first tax year and get the 25% interest, so £1000 to equal £5000. If you were to put in another £4000 the next tax year, equalling £9000, would you get +25% interest on the £4000 put in that year or the total of £9000?
i am going to open a lifetime isa. however i may purchase a house in the next couple of months. does the lifetime isa have to be used as a house deposit or can it simply be used to pay off a large sum of a home after i have bought the house?
Quick question Andy, every financial year starts in the 6th of April. Would I obtain the £2000 if I add £4000 into my ISA before the end of the financial year, add another £4000 after the start of the next financial year and then buy a house by the end of April? Thanks you for your time
Yep you definitely could. You just need to make sure that the Lifetime ISA has been open for at least 12 months before using it. That can be with just a quid.
I've got a help to buy I'm tempted to switch to a life time isa but don't want to lose out. Will take me 4 years to get to 12k and the max 3k bonus where as can get that in 3 years or less with life time isa
The big reasons to stick with a Help To Buy are that you’re not 100% sure you’ll buy or if you’ll buy in the next 12 months. Otherwise LiSAs tend to win. At the very least open a Lifetime ISA now and put £1 in to start that one year countdown
@@BeCleverWithYourCash I worked out if I move my money into a Lisa I can get the full bonus now and save faster then a help to buy. Thank you for this video really cleared things up better late then never
Sadly there are no specialist accounts, so you'll be looking at the best paying savings accounts. There are regular updates on my channel if you go to the main page
Generally it’s worth using stocks and shares for any savings that you won’t need for more than five years - BUT there’s always the risk that the initial deposit could fall in value, so you’ve got to be comfortable with that
Something wasn't clear for me and haven't been able to find information on it. Say you have 8k in a help to buy and want to transfer it into a LISA. Will I be able to transfer all that in one tax year or will I have to wait another year, keep my monthly contributions in the Help to Buy and then transfer the rest?
You can only transfer in £4K each financial year; so you’ll have to wait until next year to move the rest. So it depends when you want to buy and, if outside London, how much the house is
Hi Benny, so technically you can do that with no problem. People's circumstances change all the time which might require you to sell or rent it out. And there's no set policy that I can find which says you must be there for say 6 or 12 months before a change is allowed. However there is always a chance that if somehow they (and I'm not sure who "they" would be) found out you'd done this and decided it was always your intention to not live there yourself they could ask for the money back. I think it's an unlikely scenario though.
Just a question. Could I invest 4k in lifetime isa and 20k in stock and share isa. Or is the 4k included in you're 20k allowance. Just watched . Got my answer now thanks
Yes you can! As long as you meet that eligibility criteria explained in the video. The £4k limit for the LISA comes out of the total £20k ISA allowance
Very helpful video!. Just as question regarding the property value, does the £450k cap apply to shared ownership properties as well? Would one be able to use this cash to buy 75% share of £600k property?
If you invest in a stock isa, is the 25% charge applied on the total pot or just the initial investment? E.g. I put in £4k and then get £1k from goverment. The £5k grows and gains in value to £6k. If I then decide to withdraw, do I get charged 25% of £5k or £6k?
Me and my wife have lifetime isa's for purchase of first home. If we have example 40k paid into the lifetime isa and want to put say 20k deposit what happens to the rest of the money in the isa?
check your Ts&Cs, but you should be able to leave the rest in there and withdraw it tax-free when you get to 60. Otherwise you have to pay a 7%ish effective fee as Andy explained
Don't think this will be for me since I plan on working abroad on a visa but could or would a LISA account still work if I was to work and possibly live abroad in the future or would my account be liquidated as I am would no longer be living in the UK? any help would be greatly appreciated, thanks.
Hi Finlay, so you will be able to open one while you live in the UK, but once you move away you can't pay into it. If you then move back you can start paying back into it. As with any ISA, and gains will remain tax-free even if you're not living here.
@@BeCleverWithYourCash That really cleared things up I tried to find that information on the internet with no success thank you for your help. I have subbed as well time to start learning about finances and investments.
With the lifetime Isa if I put 4K per year and keep it in cash (not invest it ) do I still revive 25% intreast from the government. If I buy a house can I continue to pay into the lifetime Isa or does it stop
Thank you for your video, I am not sure I have understood everything. Let's say I put 4k before the end of the tax year, then I will get 1k bonus from the government. If then I don't put any more money in the LISA will I still get the 1k bonus every year? So an initial deposit of 4k will result after 10 years to a 14k fund? Or do I need to put 4k a year to get the 1k bonus? Another question about withdrawal. If I had the LISA for 2 years and decide to withdraw, will I still lose part of my initial deposit? Intuitively this is true in the first year, but what about the 2nd, 3rd, 4th year? Thanks
@@callumj4232 I am not sure I think if you put 4k per year you get a max of 1k per year. So let's say I put 4k before end of tax year I get 1k contribution end of the month, year after I put another 4k I get 1k. So after 2 years I set 8k if my own money aside and receive 2k contribution... Now I am not sure what would happen if I withdraw early but I guess it would be 10k (after 2y) minus 25% 7.5k...not great to lose 500£...so it's really aim he'd at those 1.planning to stay in the uk 2. Planning to surely buy a house with a mortgage 3. People with above average income who can deposit and forget until they are in their 60s.
@@michelecarbone2896 1. You cant think of it as a 1k bonus on 4k, its a 25% bonus on however much you put in; so if you put in £100 the government will contribute £25, if you put in £400 they will contribute £100, and so on. Note that you can add as little or as much as you like as often as you wish so long as it is less than £4000 total during the year (i.e. you do not have to put in all the money at once!)
@@michelecarbone2896 2. Yes, your calculations on loosing £500 in that scenario are completely correct. The scheme is indeed intended for those buying a house or saving for retirement *that is its purpose*. If you need to keep saving for any other purpose you are far far better off opening a standard ISA.
@@BeCleverWithYourCash Thank you! I just thought about the flexibility, if in the beginning saving in cash LISA and later changing one's mind, not to own home but rather to invest... if there's this kind of option.
I was one that was suckered into a help to buy isa years before the LISA existed. Absolutely pointless scheme as the properties in my area are well above 250k it's mental that they've never adjusted the maximum value as house prices have gone up since the scheme started. Anyway, I maxed out the total deposit that you can put into the help to buy (think it was about 12k) over the years so it's just sat there now doing nothing for me when I could have continued depositing 4k a year had it been a LISA. If I were to open a LISA now and put a quid in it, if I wait a year and then transfer my help to buy over to it, can I immediately use the LISA to buy a house?
So if your using it as a pension option your only actually getting 5% per year because after the 25% interest the government take 20% tax. They put their hands in your pocket everywhere, what a sham! Also if your only getting around 1500 per year as a long term pension option your only going to get £75 per year interest after the government sting you for 20%. LOVELY.......!!!!
Can i supplement a LISA mortgage with my own cash ie if i use £20K from my LISA can I top up another £20K from my own savings and use that to get a deposit or can i only use my LISA to get a deposit on a mortgage?
I think this type of incentive is great for those who live up North. Makes complete sense, but for those who live in London 4k a year is abismal. You wont go anywhere really.
Very helpful video, thank you very much for clarifying a lot of confusions. Is there any restrictions on what kind of property can be used with this lifetime ISA? I understand that when buying a house, you can get different mortgage deals, is there any restrictions about mortgage package from different lifetime ISA providers?
Not me being from the poorest part of the South East, having worked my arse off to get out of poverty, to then give myself a financial education and think about saving for a mortgage - to find out that most of the house prices around here are £450k+.
A question.The withdrawal penalty is 25% of money withdrawn.But what does this mean if the stocks and shares Lisa has grown 10 times in value?Does the government take 25% of your profit?
Thank you for the video. question : is that I am joint owner of a property. I am no longer a first time buyer.. is thos correct. Thank you for the upload. Very informative.
Bro I have 25 years left in lifetime Isa. I have question regarding lost decade. Say I have opened cash LISA to protect principal and Contribute 4k until I'm 50. What about the decade till I'm 60 where I can only get low intrest rate and no growth
Really good question. So in theory you'd be able to open a new Lifetime ISA after 40 for transfers but not put any money into it. But in practice I'm not sure how many offer this. Hopefully it'll change as more people go past 40 and then 50 years old. Also, it's probably best to use a Stocks and Shares LISA for retirement as it's long term - so the gains should be much better than cash LISA
@@BeCleverWithYourCash bro I watched another UK you tuber who discussed the same topic and concluded investment LISA Is better option for retirement but you're principle is at mercy of stock market
It's a shame we can't just keep investing our own money after 50, even without the government bonus. I'm 39 and the no contributions after 50 rule makes me feel like the LISA is a bit limited, even a stocks and shares one. I'm interested what others my age think about this?
Hi Andy, if I make first payment of £4K into a lifetime ISA in March before end of tax year, can I put another £4K in April a month later after the new tax year has started? Then take 25% bonus on the £8K the following March a year later?
You can’t use both the Help to Buy and Lisa for the home purchase. So you’d need to transfer the cash over, but that’s limited at £4K per year. So doing so would delay you buying until at least April 2023 if you wanted the bonus on all that money.
Hi, This video is helpful. If I own a home in my home country, will I be considered a first-time buyer here in the UK? Am I eligible to open life time isa saving account?
Defiantly considering starting a Lifetime ISA in the new tax year. Not a home owner but thinking about having a better retirement along with the work based pension and state. Just got no experience in investment, worth the risk, many be
Hi PC Newb. First I'd check you are getting the maximum contributions to your pension from your employer. And don't forget the tax relief if you're a higher rate taxpayer. In terms of having no experience in investing... well you're already investing via your pension! You don't need to be active with a LISA - you can just choose a tracker and let it do it's thing, in the same way your pension does.
Great video Thankyou. One point I have a query on is the part you talk about waying up the odds of investing more into your workplace pension if you’re a higher tax payer or Lisa. If you pay the money into your pension to reduce your 40% tax bill when you draw your pension you will be taxed 20% anyways so for the 4k allowance it’s always better to invest into a lisa? Please correct me if I’m wrong 😬
Thank you so much for this video. It answered all my questions that I have been wanting to ask and explained in such simple terms for anyone to understand
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I've just opened a LISA. Looking to buy my first home in the next 2/3 years so seems like a no brainer!
Good luck! Which one did you go for?
@@BeCleverWithYourCash Cheers! Went for the Moneybox one. Seems like one of the best out there atm.
Me too
How's it going with your LISA?
Is it lifetime cash lsa to save for deposit trustworthy! I want to say when you want to take your money out is the solicitor asking for loads of things to prove?
I should add that getting a Lifetime ISA might be a pretty bad idea if you're thinking of moving abroad down the line. While technically you can keep your Lifetime ISA (just like any ISA) while living abroad provided you don't contribute to it during your absence from the UK, it seems that most Lifetime ISA providers actually opt to close and liquidate your LISA if you stop being a UK resident. (I suspect they just want to save themselves performing the due diligence that you're paying any taxes you owe abroad etc.) This will obviously count as unauthorised withdrawal from your account so you'll get hit by that sweet 25% penalty - and that just because you decided to move to Spain or sth.
Also, down the line it's not unthinkable that the Treasury might decide to impose some withdrawal charge on the LISA balance if you decide to retire abroad, even if you're following all the rules and only accessing it after the age of 60. After all that 25% bonus came from UK taxpayers money so the Treasury might not be comfortable with it leaking into some other economy.
What if you invest money and move the funds to buy a house and liquidate it and then sell the house or mortgage and then take the cash abroad?? Am i missing something?
I suppose that theoretically would work but to my understanding, when buying a house, its directly done from LISA to solicitors (or so). Which might prompt you to check the fine print of the contracts. Its possible (i honestly dont know) that the gov will still take their money if you sell the house within certain period. Or they prevent you from selling it or using it commercially for a period of time. You must do your due diligence.
I'm non-resident now and guessing I'm pretty screwed for doing anything. I can't open any ISA, it seems.
Other reasons to invest in to a Liftime ISA is if you are already contributing the full annual allowance to your pension or if you are at risk of breaching the pension lifetime allowance. It can also be part of an early retirement strategy to supplement income until you can draw your state pension.
No doubts , A good way of growing and saving your money is through investing . You don't need to have much before you can invest. "That little money you have now can make you millions if you invest it wisely". I wasnt financial free until my 40’s and I’m still in my 40’s, bought my second house already, earn on a monthly through passive income and got 4 out of 5 goals, just hope it encourages someone that it doesn’t matter if you don’t have any of them right now, you can start TODAY regardless your age INVEST and change your future! Investing is a grand choice I made
Thanks for the great video as always. The channel is growing fast. Keep it up
Thanks Kian!
Brilliant explanaition, thanks Andy. Needed it just before I started a research project!
Really good video, some timeline breaks would have been useful for each section. Great content though 👍
Thanks Hamzah! Yeah I’ll try to get back in and add some when I get a chance
This is brilliant...just the facts and easily understandable....
Thanks Grotton, appreciate you taking the time to comment
Another fab video Andy! I’m a big fan of LISAs.
Thanks Charlotte!
Great video really well explained!! Any advice for someone who wants to build there 1st home? I already have a first to buy isa but I've now decided to build.
This is a great idea for first time buyers.
Unfortunately living in London, 450k will not get u a family home 😢
Buy an invest Buy to let you can do that as a FTB
great video Andy, thank you very much I wish I knew this before because I just turn 40y
Ah, just too late!
I don't consider LISA same as standard rate pension. who knows what will happen with personal allowance in 20 or 30 years but as it stands state pension would cover it and you would get taxed 15% at least (20% * 0.75) while LISA would be 0%. Salary sacrifice would make the difference smaller though.
It does make sense to salary sacrifice the higher tax part of the salary.
Great comparison of Pension and ISA
Thanks Peter
Problem with pensions are these questions, what is the likelihood of reaching retirement age? How long are do you expect to live to enjoy the pension? Now the age is 68 but could rise to 70. Take your 25% tax free but this hits the retirement pension payments by around 28% annual decrease. The 75% than remains you are drip fed so in order to realise all returns you must survive 12 years taking you to 80! For me unlikely to make it to retirement age.
Great video!!! I was going to plow £20k into a stocks and shares ISA next year but now I will definitely be putting £4k in a LISA then probably invest in something very safe like S&P 500 then forget about it until I’m 60! Thanks so much for this info!! Just wish the allowance would go up!
@@walterpalmer6312 Surely you mean 500 baskets?
Would not rely on 100% US. Better go for MSCi world or FTSE all world
Which company or bank is best to open a Lisa?
Thank you Andy!
Glad it was helpful!
Thank you! This is very informative.
Will there be any conflict if My partner and I open different LISA for one property we gonna buy.
I mean like, is there any one to one rule between LISA and the property?
Can you use a Lisa bonus for retirement if you’ve already used a help to buy isa for a home?
Friend of mine just told me about this. I been looking at investing my money and he said he opened one of these, I'm 38 this year so I'm close to not being able to open one of these.
Going by your video I get the feeling you think it's better just to put the extra money directly into the pension rather than using a LISA.
I know this video was 3 years ago so maybe worth doing a updated video on this?
Great video, it seems that gov in the UK can chop and change whatever tax they take whenever based on markets, crises etc... Even the withdrawal age can change on these 'instruments' (has happened in the past). Just like any pension type investment augmented (and controlled) by the gov. Nothing is for sure with these funds, you can lose capital left right an centre and rules can change at the drop of a hat! 😮
Hypothetically.... my wife and I saved £30,000 in our LISA with hope of buying our first property worth £300,000 but eventually we bought a £250,000 home and put down a 10% which amounts to £25,000. My question is can we access the balance of £5000 at retirement?
?
?
Can you have a pension and a lifetime ISA? Both myself and my partner work full time and receive a pension from our employer. Also are you saying that if me and my partner have two separate ISAs we can use both of our bonuses on a first home?
Can you answer this question.?
If you can withdraw a Lisa at 60 tax free then can you then roll that into a personal pension using max limits,ie all of salary,for the next five years.Would this then attract tax relief?- and why has no one ever asked this question before?
Thank you.
Can you please tell me how long you need to have the house to be your main residence before being able to let it out?
Can anyone help me, I'm thinking of opening an LISA, I have owned a house many years ago and im currently renting. Am I allowed to have a LISA if im not a 1st time buyer?
Can you use a LISA bonus at retirement if you’ve already used a HTB ISA bonus for buying a first house ?
Hello, For the 1st property purchase. I would love to get the Lifetime ISA for that purpose.. But I have heard that you can only use the lifetime ISA on a first-time property if you're buying a new build? That not just any property (under that sum gap) as your first-time property?
No, you can buy any property doesn't have to be a new build. My friend just bought his first home and it's nothing new.
I just feel like if you're saving for retirement over say 20 years and the interest rate is 4 percent then inflation at 7 percent will eat away at the 25 percent bonus you get?
How does the 25% government bonus work year on year? Say I put £4000 into the account in tax year 1; when this ticks over into the second tax year the government top it up with 25%, so £1000. That's now £5000. If I then make no additional payments into the account in tax year 2, at the end of that second tax year does the government top it up with 25% of the new balance, i.e. 25% of £5,000 (£1,250) or is it still 25% of that original money I paid in, i.e. 25% of £4,000 (£1,000)? Hope this makes sense!
I think the government match the money you put in each year by 25% so the bonus is limited to 1k per year
where do I open a lifetime isa?
whos the best lifetime isa company which you can do this?
Thank you for your explanation, it is very informative.
But I still have two questions:
1) Is the dividend payout from LISA perpetual? Or until 60?
2) Can I reinvest the interest in a LISA account? If yes, does it count for the 4,000 pounds annual allowance?
What if the property is less than 450, less say 100? Any penalties?
Can you use a cash LISA with a help to buy, buying scheme such as part buy, part rent?
Lets say I have decided to withdraw funds from my LISA torwards a deposit for a house, can i continue contributing into it afterwards for retirement? Or once you cash out that’s it?
You can carry on and pay in until 50.
Amazing video! One question if I move and leave the UK forever (I’m not a passport holder) do I get penalised to get the money out?
yes
can you use LISA AS YOUR DEPOSIT for a home and a cash ISA at the same time ?
But how do I open one? Can I do it on my phone? Do I need to go to a bank?
Greetings! In the scenario of buying a 1st home, is it limited to buying it in the UK? Or can I withdraw the money for a 1st home outside the UK? Thanks in advance!
Hi Kyle, yes it's UK only for a first home with a Lifetime ISA.
Thank you so much for this video, so so informative!
I was wondering if you open a cash LISA and then decide 5 years down the line you want a stock and shares LISA, can you transfer what you already have into a stock and shares LISA?
3:11 pretty sure he says you can 🤞
No you can't. LISA is for either first time home buying or retirement. Not transferable to stocks and shares because that way you can withdraw it into a liquid cash.
Hi Andy, if open the ISA life saving account this may 2024, and put a sum of £4000 , which month in 2025 can I put another £4000 to qualify for two bonuses on £8000 in two financial year ,less than 2years. Thanks
So I have 12k in my help to buy, thinking of swapping to a lisa, so I should transfer help to buy account too a normal account, close the help to buy, then transfer 4k every year into the lisa? This is more for retirement and long term
Does the interest compound? For example, if you put £4000 in the first tax year and get the 25% interest, so £1000 to equal £5000. If you were to put in another £4000 the next tax year, equalling £9000, would you get +25% interest on the £4000 put in that year or the total of £9000?
The 25% bonus is just on new additions. But you’ll earn interest on all the cash in there at whatever rate the account offers
But the interest won't be as high as inflation so over the 20 years period the inflation will have eaten away at your 25 percent bonus
Can anyone please help guide me whihc provider shall i select for Lisa?.
does the lifetime isa have to be used to purchase a property that you will live in or can it be used to purchase a home to rent?
i am going to open a lifetime isa. however i may purchase a house in the next couple of months. does the lifetime isa have to be used as a house deposit or can it simply be used to pay off a large sum of a home after i have bought the house?
Quick question Andy, every financial year starts in the 6th of April. Would I obtain the £2000 if I add £4000 into my ISA before the end of the financial year, add another £4000 after the start of the next financial year and then buy a house by the end of April? Thanks you for your time
Yep you definitely could. You just need to make sure that the Lifetime ISA has been open for at least 12 months before using it. That can be with just a quid.
I've got a help to buy I'm tempted to switch to a life time isa but don't want to lose out. Will take me 4 years to get to 12k and the max 3k bonus where as can get that in 3 years or less with life time isa
The big reasons to stick with a Help To Buy are that you’re not 100% sure you’ll buy or if you’ll buy in the next 12 months. Otherwise LiSAs tend to win. At the very least open a Lifetime ISA now and put £1 in to start that one year countdown
@@BeCleverWithYourCash I worked out if I move my money into a Lisa I can get the full bonus now and save faster then a help to buy. Thank you for this video really cleared things up better late then never
Great!
Can me and Mt partner have separate accounts but use it for the same property
Hi, Can you share on accounts 40+ can open and help towards buying their first home
Sadly there are no specialist accounts, so you'll be looking at the best paying savings accounts. There are regular updates on my channel if you go to the main page
If you buy a business property through a limited company does that count as a first home?
Of course not
Can you use it to buy a flat?
Can you invest in a index fund into a lifetime isa
Should I get a stock or cash isa? I'll be saving for probably 10 years when I start for a home.
Generally it’s worth using stocks and shares for any savings that you won’t need for more than five years - BUT there’s always the risk that the initial deposit could fall in value, so you’ve got to be comfortable with that
Something wasn't clear for me and haven't been able to find information on it.
Say you have 8k in a help to buy and want to transfer it into a LISA. Will I be able to transfer all that in one tax year or will I have to wait another year, keep my monthly contributions in the Help to Buy and then transfer the rest?
You can only transfer in £4K each financial year; so you’ll have to wait until next year to move the rest. So it depends when you want to buy and, if outside London, how much the house is
What happens if you use LISA to help get more money towards a home, buy the home then sell the home? would you lose the cash or something?
Hi Benny, so technically you can do that with no problem. People's circumstances change all the time which might require you to sell or rent it out. And there's no set policy that I can find which says you must be there for say 6 or 12 months before a change is allowed.
However there is always a chance that if somehow they (and I'm not sure who "they" would be) found out you'd done this and decided it was always your intention to not live there yourself they could ask for the money back. I think it's an unlikely scenario though.
@@BeCleverWithYourCash thanks
Can someone do a lifetime isa just before the 6th April and deposit £4k last min and get £1000 Gov bonus.
Just a question. Could I invest 4k in lifetime isa and 20k in stock and share isa. Or is the 4k included in you're 20k allowance. Just watched . Got my answer now thanks
The 4000k for Lisa is included in the 2000k allowance..so if you put 4k in Lisa you have only 16000 left allowance
Do you have to put your in the max amount of 4k to get the 25% yearly bonus? Or can it be below 4k input and you still get the yearly 25% bonus?
Can be any amount less that 4K too and they will add 25% of that amount
Hi Andy. Great video. I’ve opened a stocks & shares ISA this year. Can I also open & pay into a LISA too?
Yes you can! As long as you meet that eligibility criteria explained in the video. The £4k limit for the LISA comes out of the total £20k ISA allowance
@@BeCleverWithYourCash Great thanks! 👍
Very helpful video!. Just as question regarding the property value, does the £450k cap apply to shared ownership properties as well? Would one be able to use this cash to buy 75% share of £600k property?
HI Martynas, yes you can use a LISA for your part of the purchase, though the total property value is used to check eligibility (under £450,000)
If you invest in a stock isa, is the 25% charge applied on the total pot or just the initial investment? E.g. I put in £4k and then get £1k from goverment. The £5k grows and gains in value to £6k. If I then decide to withdraw, do I get charged 25% of £5k or £6k?
25% withdrawal charges on the amount you withdraw
Oh fuck, if I knew this when I came to the Uk, I just wasted time.
Me and my wife have lifetime isa's for purchase of first home. If we have example 40k paid into the lifetime isa and want to put say 20k deposit what happens to the rest of the money in the isa?
check your Ts&Cs, but you should be able to leave the rest in there and withdraw it tax-free when you get to 60. Otherwise you have to pay a 7%ish effective fee as Andy explained
Would I be classed as a 1st-time buyer if I inherited a house off family?
This is a bit late but no you won't be classed as a first time buyer
@@frz04 Thanks buddy 👍
Don't think this will be for me since I plan on working abroad on a visa but could or would a LISA account still work if I was to work and possibly live abroad in the future or would my account be liquidated as I am would no longer be living in the UK? any help would be greatly appreciated, thanks.
Hi Finlay, so you will be able to open one while you live in the UK, but once you move away you can't pay into it. If you then move back you can start paying back into it.
As with any ISA, and gains will remain tax-free even if you're not living here.
@@BeCleverWithYourCash That really cleared things up I tried to find that information on the internet with no success thank you for your help. I have subbed as well time to start learning about finances and investments.
With the lifetime Isa if I put 4K per year and keep it in cash (not invest it ) do I still revive 25% intreast from the government. If I buy a house can I continue to pay into the lifetime Isa or does it stop
You can hold cash or stocks and shares in your Lifetime ISA, or have a combination of both. You will receive 25% bonus in either cases
The house that I live in is under my brother and dad's name. Can I use my Lifetime ISA to remortgage and add my name in? (I am a first time buyer)
Hmm... interesting one. I'd guess no as you're not buying, you'd be remortgaging an existing property. Might be worth asking a mortgage advisor
How do you get a 10k return in a six week period?
It's 2k. 8k invested, 2k from govt. 10k total
Thank you for your video, I am not sure I have understood everything. Let's say I put 4k before the end of the tax year, then I will get 1k bonus from the government. If then I don't put any more money in the LISA will I still get the 1k bonus every year? So an initial deposit of 4k will result after 10 years to a 14k fund? Or do I need to put 4k a year to get the 1k bonus? Another question about withdrawal. If I had the LISA for 2 years and decide to withdraw, will I still lose part of my initial deposit? Intuitively this is true in the first year, but what about the 2nd, 3rd, 4th year? Thanks
To my understanding they only add 25% to the money you put in the one time.
@@callumj4232 I am not sure I think if you put 4k per year you get a max of 1k per year. So let's say I put 4k before end of tax year I get 1k contribution end of the month, year after I put another 4k I get 1k. So after 2 years I set 8k if my own money aside and receive 2k contribution... Now I am not sure what would happen if I withdraw early but I guess it would be 10k (after 2y) minus 25% 7.5k...not great to lose 500£...so it's really aim he'd at those 1.planning to stay in the uk 2. Planning to surely buy a house with a mortgage 3. People with above average income who can deposit and forget until they are in their 60s.
@@michelecarbone2896 1. You cant think of it as a 1k bonus on 4k, its a 25% bonus on however much you put in; so if you put in £100 the government will contribute £25, if you put in £400 they will contribute £100, and so on. Note that you can add as little or as much as you like as often as you wish so long as it is less than £4000 total during the year (i.e. you do not have to put in all the money at once!)
@@michelecarbone2896 2. Yes, your calculations on loosing £500 in that scenario are completely correct. The scheme is indeed intended for those buying a house or saving for retirement *that is its purpose*.
If you need to keep saving for any other purpose you are far far better off opening a standard ISA.
Dose it have to be for the first house to buy?
Yes, first home
Is it possible to transfer cash LISA to stocks and shares LISA?
Yes! Though it’ll down to each provider if they allow transfers in
@@BeCleverWithYourCash Thank you! I just thought about the flexibility, if in the beginning saving in cash LISA and later changing one's mind, not to own home but rather to invest... if there's this kind of option.
@@Maniaquin Yep definitely!
I was one that was suckered into a help to buy isa years before the LISA existed. Absolutely pointless scheme as the properties in my area are well above 250k it's mental that they've never adjusted the maximum value as house prices have gone up since the scheme started. Anyway, I maxed out the total deposit that you can put into the help to buy (think it was about 12k) over the years so it's just sat there now doing nothing for me when I could have continued depositing 4k a year had it been a LISA.
If I were to open a LISA now and put a quid in it, if I wait a year and then transfer my help to buy over to it, can I immediately use the LISA to buy a house?
According to a Martin Lewis video I also just watched on LISA's and comparing them to the help to buy ISA, yes, you could do that
Where are the best cash ISAs
Right now Cynergy offers 0.5% to existing customers, and you can open an easy access account to become one
So if your using it as a pension option your only actually getting 5% per year because after the 25% interest the government take 20% tax. They put their hands in your pocket everywhere, what a sham!
Also if your only getting around 1500 per year as a long term pension option your only going to get £75 per year interest after the government sting you for 20%. LOVELY.......!!!!
You won’t get taxed on withdrawals when you reach 60 as it’s held in an ISA wrapper
@@BeCleverWithYourCash yes but your still paying 20% tax after the first year as you said in your video?
No money is free
Can i supplement a LISA mortgage with my own cash ie if i use £20K from my LISA can I top up another £20K from my own savings and use that to get a deposit or can i only use my LISA to get a deposit on a mortgage?
That’s a good question
I think this type of incentive is great for those who live up North. Makes complete sense, but for those who live in London 4k a year is abismal. You wont go anywhere really.
Very helpful video, thank you very much for clarifying a lot of confusions. Is there any restrictions on what kind of property can be used with this lifetime ISA? I understand that when buying a house, you can get different mortgage deals, is there any restrictions about mortgage package from different lifetime ISA providers?
Not me being from the poorest part of the South East, having worked my arse off to get out of poverty, to then give myself a financial education and think about saving for a mortgage - to find out that most of the house prices around here are £450k+.
A question.The withdrawal penalty is 25% of money withdrawn.But what does this mean if the stocks and shares Lisa has grown 10 times in value?Does the government take 25% of your profit?
Yes 25% of value of lisa
Can i buy a house with my LISA saving, If I am buying a property with my partner who is a second time buyer?
This was SO helpful, thanks so much for spelling it all out!
Thank you for the video.
question : is that I am joint owner of a property. I am no longer a first time buyer.. is thos correct.
Thank you for the upload. Very informative.
Is it worth getting a stocks and shares isa during a recession? I was planning to get one this year but now I’m worried it’s a dumb decision
Bro I have 25 years left in lifetime Isa. I have question regarding lost decade. Say I have opened cash LISA to protect principal and Contribute 4k until I'm 50. What about the decade till I'm 60 where I can only get low intrest rate and no growth
Really good question. So in theory you'd be able to open a new Lifetime ISA after 40 for transfers but not put any money into it. But in practice I'm not sure how many offer this. Hopefully it'll change as more people go past 40 and then 50 years old.
Also, it's probably best to use a Stocks and Shares LISA for retirement as it's long term - so the gains should be much better than cash LISA
@@BeCleverWithYourCash bro I watched another UK you tuber who discussed the same topic and concluded investment LISA Is better option for retirement but you're principle is at mercy of stock market
It's a shame we can't just keep investing our own money after 50, even without the government bonus. I'm 39 and the no contributions after 50 rule makes me feel like the LISA is a bit limited, even a stocks and shares one. I'm interested what others my age think about this?
I’ve been contemplating to open a LISA, Great video
Hi Andy, if I make first payment of £4K into a lifetime ISA in March before end of tax year, can I put another £4K in April a month later after the new tax year has started? Then take 25% bonus on the £8K the following March a year later?
Commented to see answer.
Good question... Following
I did....
Yes you can
Also to open investment LISA I have to do it by 39 years old
You do need to have had the account open for 1 year
I will be 39 in few months. Now I have a Help to Buy ISA almost 10k in already. Can I open a Lifetime ISA too?
You can’t use both the Help to Buy and Lisa for the home purchase. So you’d need to transfer the cash over, but that’s limited at £4K per year. So doing so would delay you buying until at least April 2023 if you wanted the bonus on all that money.
Hi, This video is helpful. If I own a home in my home country, will I be considered a first-time buyer here in the UK? Am I eligible to open life time isa saving account?
If you use the LISA to invest in the stock market do you lose the 25% bonus
That thought just crossed my mind. I would assume you'd have to wait until 60 to invest the money without losing the bonus.
Can you open a lisa and a cash isa in the same year? Or a lisa and a stock and shares isa in the same year?
Yep!
Defiantly considering starting a Lifetime ISA in the new tax year. Not a home owner but thinking about having a better retirement along with the work based pension and state. Just got no experience in investment, worth the risk, many be
Hi PC Newb. First I'd check you are getting the maximum contributions to your pension from your employer. And don't forget the tax relief if you're a higher rate taxpayer.
In terms of having no experience in investing... well you're already investing via your pension! You don't need to be active with a LISA - you can just choose a tracker and let it do it's thing, in the same way your pension does.
Great video Thankyou. One point I have a query on is the part you talk about waying up the odds of investing more into your workplace pension if you’re a higher tax payer or Lisa. If you pay the money into your pension to reduce your 40% tax bill when you draw your pension you will be taxed 20% anyways so for the 4k allowance it’s always better to invest into a lisa? Please correct me if I’m wrong 😬
Thank you so much for this video. It answered all my questions that I have been wanting to ask and explained in such simple terms for anyone to understand