Hi all, not asking for bespoke financial advice (obviously) but a request for comment.
Considering a LISA; any recommendations on provider that I can look into? I want to make the most of the bonus by government. I was looking at Nutmeg but I’m not too sure anymore.
Is it even a massively good decision seeing as the max purchase has been 450k for ages?
I have one with Beehive (Nottingham Building Society). Keep meaning to transfer to Moneybox because their rates are better. Previously had Skipton and Nutmeg, all were fine but Skipton’s online portal was quite old fashioned and relied on this ‘code card’ which seemed like a very primitive bit of security.
Where I intend to buy it’s a no brainer, but if I lived in London or another expensive city I wouldn’t touch it with a bargepole. £450k buys you bugger all as it stands. Loads of horror stories of people who had to accept getting back less than they put in even to buy a fairly basic property.
What did you think of Nutmeg? Do the fees make it not worth it? Asking similarly about Moneybox
Was with Nutmeg for a couple of months before Skipton launched the first savings ISA (to get the clock running on the 1 year opened before you can cash out for a house). ISTR whatever the minimum balance was there did rather well, but I’m not much of an investor.
Only used Moneybox for DD creation on easy access savings. App is nice enough.
I use Dodl as it has the lowest fees.
I already maxed out a help to buy isa when buying a house - I understand you can still access the retirement benefits from a LISA? You just can’t use it on a house again?
I also recently opened an S&S ISA - I understand you can open and pay into a LISA with stocks and shares as well as the S&S ISA?
Yeah but you should probably weigh it up against pension contributions before making a decision either way
Also, yes you can pay into both a LISA and a S&S ISA as long as your total contribution is within the £20,000
For anyone with employer contributions to their pension, a LISA for retirement doesn’t make sense. It’s a closer call for the self employed.
I’d just open one anyway, even if it’s only a nominal sum, because of the age limit on opening. It’s main benefit could actually be to squirrel away some inheritance in your 40s…
What’s the limitation r.e a workplace pension? Can’t you benefit from both?
Good advice re inheritance but yeah I’m too young for that thankfully
You can, but the workplace pension will give you much more! So, if you can add the same money to your workplace pension (plus employer contribution) or to your Lisa, the pension will always win.
Plus, now the age you can access your pension is so low, you can actually get your hands on pension money earlier (age 55) than the lisa (age 60). The Lisa was a way for the treasury to cook the books a bit by pushing liabilities down the road. No idea if it worked.
So, if you have cash to put away, the order of priority for almost everyone would be:
Max out workplace pension
Max out private pension (because you can access it earlier, but also you don’t have to stop contributing at 50, like the Lisa)
Max out retirement Lisa
The Lisa probs also is at risk if you go bankrupt and even less attractive in some cases for married couples etc.
Essentially, it’s a solution looking for a problem.
I mention inheritance, because it’s the only time (for most of us) when you may be able to max out your pension contributions.
Awesome thanks for the advice
Also worth considering that any pension pot you’ve built up will be ignored when calculating any benefit entitlement should you need it in future, whereas LISAs will be considered the same as any savings; ergo they expect you to withdraw (even at a loss) if you hit hard times.
You could withdraw all your money from a LISA at 60 without paying any tax though. Also the way things are going the retirement age is likely to hit 70 so 60 will be the withdrawal date for both anyway.
Yeah, there’s uncertainty though. Thinking more broadly, I’d guess that the number of people with much in a retirement Lisa is vanishingly small compared to pensions. Which leaves Lisa holders at risk of being sc***ed over by future changes, imo, just because a future gov may calculate that it will make no difference to election chances anyway.