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Lifetime ISA for retirement

(9 Posts)
chocoshopoholic Sun 19-Mar-17 10:57:07

I approach 40 this summer, and as far as I understand it, I have to open a lifetime isa in April or May or loose the chance to forever once I hit 40.

It appears that only the stocks and shares ones will be available from a limited number of providers early in the year.

There seems to be little information on them at the moment, but I'm not sure about the charges.

I'll probably be able to put in around half of the maximum for the next few years.

I think that there are charges for trading, for the platform and for the manager in other stocks and shares isas. are these calculated cumulatively or just on what you put in each year? Has anyone come across any simple worked examples I could look at?

The bonus sounds good, but I'm worried that the charges will make it not worth it for a small amount.

Jng1 Sun 19-Mar-17 12:24:08

Hi choco
I'm too old for the LIFA, but saw this guide on MSE which might be helpful:
www.moneysavingexpert.com/savings/lifetime-ISAs

It looks as if you can transfer it to another provider (like you can with ISAs) so if you're sure you want one and you're under pressure to meet the deadline, it might be worth picking one which seems reasonable and then putting a date in your diary for say, 6months to a year, when you will review all the providers in the market at that point and decide if yours is still competitive, and if not, transfer it?

Hargreaves Lansdown have a good reputation in the personal finance market, and provide very clear information about ISAs, pensions etc. Their ISA is 0.45% per year management charge and about £12 per trade. I can't find details of the cost of their LIFA yet though.
But on a small amount of £2000 for the first year it shouldn't be too much and at least it would get you started?
www.hl.co.uk/__data/assets/pdf_file/0009/10604268/Lifetime-ISA-factsheet.pdf

chocoshopoholic Sun 19-Mar-17 12:36:59

Thank you.

The £12 per trade charges are part of what's confusing me.

If I was to put £50per month in, would £12 be immediately taken as a charge each month? If I saved up and put say £1000 in in one go would the charge be £12 in total making it more cost effective?

specialsubject Sun 19-Mar-17 12:43:21

Putting the cash in and buying the shares are two separate things. If you are drip feeding at this low level, other providers will cost you less. There are several about, but as an example axa charge a flat 0.35% and no transaction fees. I got a free first year with them, check for special offers.

For full protection, don't have more than 50k with each provider. No protection against market moves, naturally, but the fscs does cover fraud and going bust.

Jng1 Sun 19-Mar-17 13:02:05

Sorry - my autocorrect was changing LISA to LIFA (an abbreviation I use at work for something!)

SpecialSubject - I agree about other providers generally being cheaper (I'm with Interactive Investor, not HL, for this very reason) However I think the problem the OP has at the moment is that not many providers have published details of their LISA and many aren't planning to launch until after her April deadline?
MSE only quotes 3 that are available at the moment. Does AXA have one - I couldn't find it.

Again, have a look at MSE for a breakdown of charges to expect (Point 9). This is for a S&S ISA, but the principle will be the same (but check exact rates, as a LISA may be different to their S&SISA:

www.moneysavingexpert.com/savings/stocks-shares-isas

JoJoSM2 Sun 19-Mar-17 13:07:35

I use YouInvest which is a platform that offers thousands of funds. They charge 0.25% + £1.50 per trade. In your position, you could just open a LISA not to miss the deadline and then trade quaterly to avoid forking out for a transaction every month.

Jng1 Sun 19-Mar-17 13:48:06

No LISA available yet from YouInvest though JoJo - that's the problem for the OP.

There may be a flurry of activity from providers for the start of the new tax year on 6th April, so perhaps don't rush to open one before then OP?

Do read up all the restrictions though as they sound quite punitive, and some banks and providers have criticised them for being overly complicated.

chocoshopoholic Sun 19-Mar-17 20:32:30

Thanks everyone. I definitely wouldn't be rushing so much if I wasn't so close to 40.

JoJoSM2 Sun 19-Mar-17 21:44:00

Jng1, I've had an email from them indicating that there would be one. We are still 2-3 weeks away from the new tax year.

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