To have a cash Lifetime ISA and stocks and shares Lifetime ISA? Any advice please?

[Kloklo]

Hi all,

I currently have a cash Lifetime ISA and a stocks and shares ISA (only had it about 18 months, so still v new to investing).

I’m planning to use the Lifetime ISA for retirement, so won’t need it soon (am in my early 30s) and can’t access it till I’m 60 anyway.

I’m wondering about also opening a stocks and shares Lifetime ISA (as this would give me the 25% government bonus on top of the amount I pay in each year, and will potentially outperform a cash Lifetime ISA).

The reason why I’m thinking about having both a cash LISA and stocks and shares LISA is because I can’t transfer my cash LISA to a stocks and shares LISA (no LISA providers offers this option), and I’d like to keep the cash one for security and an S&S one for growth.

Do you think this is a good idea? Has anyone got a cash Lifetime ISA and a stocks and shares LISA?

Thanks!

I realise, if I did get a stocks and shares LISA, that I won’t be able to contribute to both my cash LISA and my stocks and shares LISA in the same tax year.

I don't see much advantage for most people using a LISA for retirement purposes.

If you are saving for the long term (over 10 years) you are much better off with stocks and shares rather than cash as the interest rate is far higher.
I would keep a small amount as cash in case of emergency (a few thousand say) but put the rest in stocks and shares.
No idea what a LISA entails though!

Thanks bungaloid and Snack!

I originally set up a Lifetime ISA when I got my first job as a supplement to my pension. I was quite risk-averse then (am a bit less so now) and knew absolutely nothing about investing, so decided to stick to cash LISA rather than stocks and shares LISA.

I realise now that cash will obviously depreciate over time and so it’s much better in the long run to invest money rather than save.

I’m going to contact a provider though to find out if I can transfer my cash LISA to them so I can convert it into a S&S LISA. Not sure it can be done but we’ll see!

LTB.

Thanks all!

I think you should go and see an IFA

Old thread I realise...I put £30 into a S&S LISA 3 years ago and forgot about it. I just had a look and excluding government contribution it has grown by 5.6% p/a. That's invested in a balanced fund that has a mix (so erring toward lower risk) as I am (now) over 40. If I was in my 20s I would probably have chosen a more adventurous fund. Anyway I'm now putting more in while I can get the government contribution.

You don't need an IFA for this.

A LISA can be a good option if you are a basic rate taxpayer (on 50k or less) and are already saving into a pension - because you will have to pay tax on your pension when you receive it, but wont have to pay tax on the money from your ISA. So when you get to 68 or whatever, you could potentially take £12.5k a year from your pension (up to the tax free limit) and more from your ISA (which you wouldn't pay tax on anyway) - depending on how much is in both of these of course!

If you are a higher rate tax payer I would definitely prioritise a pension though, for more tax relief; or if you don't have a pension yet I would do that first.

As you're so young I would go for fund that is diverse across sectors and countries. but 100% equities.

I'm not a financial advisor though.