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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