LISA - Peoples view?

mikecmr

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just wondering how people feel about the LISA (lifetime ISA)

just been looking into them and I like the idea in principle but theres something nagging me that my money is better elsewhere?
 

homie

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just wondering how people feel about the LISA (lifetime ISA)

just been looking into them and I like the idea in principle but theres something nagging me that my money is better elsewhere?
Absolutely worth it. Nothing comes even close to the 25% bonus paid every year on these, even if its only up to £1000. But, only if you are planning to keep it until retirement or to buy a house. Otherwise there early withdrawal charges that will claw back the 25%

Of course there is nothing to say future governments wont change the rules on them over time.
 
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Jon

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Is this something you would do @katykicker ?

I REALLY need to start something for savings.... and pensions lol
 
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mikecmr

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signed up today to the skipton one just chucking in cash I can at the moment :) still have isas etc for access money I know this one is locked away
 

InItForTheMoney

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Apologies if late, but I disagree with @homie if you're a higher rate tax payer.
25% is a fantastic return, but you effectively get a return 40% (or 45% if upper tax rate payer) thanks to tax relief on your pension. The other advantage is that you can (currently) access your pension at 55, but a LISA at 60.

The 25% penalty for early withdrawal isn't just the government clawing back their contribution either. It's a 25% penalty on your whole pot i.e. both your contributions and theirs.

Of course, if you're gonna use it as a first-time buyer then def. still worth it, no matter what tax band you're in.
 

homie

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Apologies if late, but I disagree with @homie if you're a higher rate tax payer.
25% is a fantastic return, but you effectively get a return 40% (or 45% if upper tax rate payer) thanks to tax relief on your pension. The other advantage is that you can (currently) access your pension at 55, but a LISA at 60.

The 25% penalty for early withdrawal isn't just the government clawing back their contribution either. It's a 25% penalty on your whole pot i.e. both your contributions and theirs.

Of course, if you're gonna use it as a first-time buyer then def. still worth it, no matter what tax band you're in.
You know, I would not have even though about higher rate tax. Good point.
 

Queen Jess

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Apologies if late, but I disagree with @homie if you're a higher rate tax payer.
25% is a fantastic return, but you effectively get a return 40% (or 45% if upper tax rate payer) thanks to tax relief on your pension. The other advantage is that you can (currently) access your pension at 55, but a LISA at 60.

The 25% penalty for early withdrawal isn't just the government clawing back their contribution either. It's a 25% penalty on your whole pot i.e. both your contributions and theirs.

Of course, if you're gonna use it as a first-time buyer then def. still worth it, no matter what tax band you're in.
But I think it also depends on whether you have maxed out your pension at work (i.e. whether you have already got the maximum matching from your employer or not)?

I think there is also a maximum amount you can have in your pension before you start getting charged. I really don't have the details here, but think it is about £1m.... probably not relevant for any of us!
 
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Queen Jess

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Is this something you would do @katykicker ?

I REALLY need to start something for savings.... and pensions lol
Not for everyone, but when I got a bit of money from a will, I decided to get proper financial advice to set up a stocks and shares ISA (as I have no idea what I am doing...). It was definitely worth it and I will go back in a few years time to have a review and look at my pension as I suspect my circumstances will be completely different by then (I have had a child since the last review as a start!).

It can be pricey though.
 

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I’ve spent the entire of tonight nearly trying to decide if I want a pension or lisa

I have neither at the moment. At the age of 37 I never have!

The lisa does sound good and I would be Lower tax %20
 

InItForTheMoney

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@Jon I think the received wisdom from people like Paul Lewis of MoneyBox etc, is if you're unsure then just open one up and stick £1 in so that you don't miss the boat. That way you can always go back and pay in your allowance until you're 50 if you decide you want to.
 
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InItForTheMoney

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But I think it also depends on whether you have maxed out your pension at work (i.e. whether you have already got the maximum matching from your employer or not)?

I think there is also a maximum amount you can have in your pension before you start getting charged. I really don't have the details here, but think it is about £1m.... probably not relevant for any of us!
Yup, up to £40k in a pension in one year. Current lifetime limit is £1.03M but may vary with future governments. Agreed I won't be troubling those sort of figures for quite some time!
 

mikecmr

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had my first payment form the gov :D so far so good with the lisa :D
 
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Queen Jess

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I’ve spent the entire of tonight nearly trying to decide if I want a pension or lisa

I have neither at the moment. At the age of 37 I never have!

The lisa does sound good and I would be Lower tax %20
Didn't you have a workplace pension when you were working? I know you need to do your own thing now, but I am hoping you grabbed the free money from your employer whilst you were there? I certainly max out my free money from my employer...
 

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Didn't you have a workplace pension when you were working? I know you need to do your own thing now, but I am hoping you grabbed the free money from your employer whilst you were there? I certainly max out my free money from my employer...
yeah there was one but i never opt'd in lol
 

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yeah there was one but i never opt'd in lol
Doh... don't you get opted in automatically these days? Thought it came in a couple of years ago as the government is worried that no one has enough money to actually live since no one is saving enough into a pension?!

I know some schemes are really awful, but I have had a couple where they pay double your contribution up to a small % of your salary. I took the max obviously, although my pension pot is still pitiful. Stupid low interest/annuity rates.
 

Jon

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Doh... don't you get opted in automatically these days? Thought it came in a couple of years ago as the government is worried that no one has enough money to actually live since no one is saving enough into a pension?!

I know some schemes are really awful, but I have had a couple where they pay double your contribution up to a small % of your salary. I took the max obviously, although my pension pot is still pitiful. Stupid low interest/annuity rates.
I think I was about to get automatically opt'd in this year but... well.. I left didn' I lol
 

grant.macgregor

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Hold just over £10k in my Skipton LISA and plan to buy before the end of the year.

Nothing but praise for it!
 
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mikecmr

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yeah must admit it was a a trouble free application and i'm slipping what I can into it each month :D
 

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