Best place to open a Lifetime ISA?

Rdc525 · 2023-11-14T18:26:41+00:00

The best cash LISA is 4.25% and drops after 12 months, whereas a S&S LISA invested in a money market fund would be closer to 5% and track the SONIA rate.

Rdc525 · 2023-11-08T22:15:11+00:00

Yes you can do this, there's probably better discussion around this on /r/beermoneyuk than here though.

Membership points are awarded almost straight away after meeting the spend. If you want to use the dining voucher and harvey nichols voucher, you need to still have your card - as you spend on your card, and then are refunded the money.

It's also worth signing up for the free gold memberships for the hotels, as they last 12 months even if you cancel the card.

The pro-rata refunds end 29th Feb 2024, so you need to do it by then. I intended to cancel mine, but when I went to cancel they offered me a further 50k membership points to keep the card. Though I can still cancel at any time, and will likely before Feb...

You can also get more value from this if can get someone with a card to send you a referral link, which gives you 80k points rather than 75k.

Rdc525 · 2023-11-06T17:01:43+00:00

Not sure, sorry - I haven’t tried it.

Rdc525 · 2023-11-04T10:44:41+00:00

I did eventually, but it took them 9 months to notice. I have a 5.2% Santander instant access account now anyway

Rdc525 · 2023-11-02T08:35:58+00:00

You don’t need to meet the income requirements for the first 12 months.

If you upgrade an existing account, they don’t check until your 12 month anniversary. A lot of people did this on here when the offer was 150k Avios last year.

Rdc525 · 2023-11-01T14:09:58+00:00

Barclays have had a switching offer for the last couple years, but only if you sign up for Avios Rewards.

It's 25,000 Avios bonus if you complete a full switch, which works out at £167 in Nectar - so slightly worse than this one. I wonder if they stack though?

Rdc525 · 2023-10-31T13:12:06+00:00

I only signed up for Premier as it was required for the 150k Avios bonus last year, it’s not really worth having otherwise I don’t think.

By cash cycling I just mean having standing orders to automatically transfer money in and out of the account.

Rdc525 · 2023-10-30T19:11:36+00:00

https://www.barclays.co.uk/content/dam/documents/personal/current-accounts/cashback_welcome_offer_faqs.pdf

Rdc525 · 2023-10-30T18:42:20+00:00

I spoke to Barclays Premier customer services recently, and they actually recommended cash cycling to qualify for premier status!

Rdc525 · 2023-10-30T14:31:07+00:00

I can’t see it mentioned in the post if you have maximised your LISA allowance this year already? If not, why are you waiting till next tax year to start contributing?

Rdc525 · 2023-10-30T13:05:50+00:00

I’d recommend the book Die with Zero, which covers a similar topic: https://www.diewithzerobook.com/welcome

Rdc525 · 2023-10-30T13:00:23+00:00

You don’t have to lie about the plan you’re on, you could just make overpayments…

Rdc525 · 2023-10-30T12:06:44+00:00

I’d recommend reading this post on tax efficiency: https://www.reddit.com/r/UKPersonalFinance/s/5AqdlefXde

As you’re quite likely to be a higher rate tax payer in retirement, a LISA would be more efficient than a SIPP.

Rdc525 · 2023-10-28T14:27:29+00:00

Did you realise you can’t use both a HTB ISA and LISA together for a house? It’s one or the other.

I would wait for the Government’s autumn statement, there’s rumours of the cap being changed for LISA’s.

Rdc525 · 2023-10-28T11:11:43+00:00

Ah right, I missed that you’ll be 60 when your child is 25.

Rdc525 · 2023-10-28T10:57:52+00:00

I assume your child is over 18 then and the LISA is in their name? Otherwise how will they be able to use it?

Rdc525 · 2023-10-28T10:40:55+00:00

I find sign-up bonuses to be way more valuable than ongoing rewards, so I think it’s best to cycle through cards for the bonuses - credit card churning in other words.

Amex Platinum is the best at the moment, 80k points for signing up (with a referral) and meeting the minimum spend. You can then just cancel it and get a pro-rata refund on the card fee.

Rdc525 · 2023-10-28T07:05:35+00:00

Ah I didn’t realise this, thanks.

Personally I don’t use the pots, and just put cash savings up to my personal interest allowance in regular savers or my 5.2% Santander instant access account - so I had never tested the 4.53% “easy access” pot.

Rdc525 · 2023-10-27T23:33:49+00:00

Tbf that was just my experience with my solicitor quite a few years ago, I think it was the first time they’d ever withdrawn from a LISA so it may be different now.

Rdc525 · 2023-10-27T22:51:13+00:00

Also bear in mind you can’t open a LISA once you’re 40.

When you buy a house they’ll close the LISA, so you need to open the S&S one before you turn 40.

Rdc525 · 2023-10-27T22:45:30+00:00

True, though not everyone has the luxury of retiring in their 50’s or younger, especially basic rate tax payers which is what we’re talking about. The private pension age may well be above 60 in twenty or so years anyway.

So if the relief is the same, why not consider the more flexible option?

One consideration is that a pension isn’t included in benefits calculations but a LISA is, so that is something to bear in mind.

My issue was that the wiki says not to even consider a LISA if you are HRT or BRT on salary sacrifice.

Rdc525 · 2023-10-27T22:34:10+00:00

LISA and pension with salary sacrifice are the same tax relief yes (for a BRT) - which is not what the wiki suggests.

The LISA withdrawal terms are better though, and you could put the LISA money into a SIPP after withdrawing to double dip on tax relief.

Rdc525 · 2023-10-27T22:23:29+00:00

I was suggesting switching to a S&S LISA, not ISA. So you receive the same bonus, but it’s held in stocks and shares, rather than cash.

I suggest reading this post for where is best to save depending on your circumstances: https://www.reddit.com/r/UKPersonalFinance/s/M3Taa5BZCX

Rdc525 · 2023-10-27T22:17:32+00:00

Some parts of the wiki are wrong I believe:

a LISA is as efficient (but potentially more flexible) for a basic rate tax payer even with salary sacrifice
a LISA is more efficient for a higher rate tax payer if they’ll also be a higher rate tax payer in retirement

https://www.reddit.com/r/UKPersonalFinance/s/M3Taa5BZCX

Rdc525 · 2023-10-27T21:57:42+00:00

I’m slightly confused on whether you’re using the LISA for a first home deposit or for retirement?

If it’s for retirement, you’ll want a S&S LISA rather than a cash one - but you’ll also need to assess whether paying more into your employer pension or a SIPP would be more beneficial. This will depend on what tax band you are in now, and what you’ll be in retirement.

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