Lifetime ISA advice
Discussion
Hi all,
I am fairly clueless in terms of finance and the different products and options out there. I have just recently turned thirty and have started thinking seriously about the future and with that in mind I am hoping for a bit of advice. I may still go to a financial advisor but in the meantime hoping I could get some pointers on here from you more savvy PistonHeaders.
I currently have a stocks and shares ISA with on online platform (moneybox) which I put around £100-£200 a month into, at the minute this is all I can afford as my wife is on maternity but will increase over the next year or so. I also pay the max amount into my pension which is matched by my company.
I received an e mail today regarding the lifetime ISA from moneybox, my understanding is that this can be used as a savings tool for retirement? As long as I keep the money there until I am sixty it can then be removed tax free?
What is the general opinion on this lifetime ISA? Would it be a good option to have alongside my company pension and stocks and shares ISA? With the view to taking it out as a lump sum at retirement age and "living off" my company pension.
Sorry for the long winded post, would appreciate and advice and also if anyone is a financial advisor or can recommend one in the West of Scotland feel free to PM me, hopefully I could have a chat.
I am fairly clueless in terms of finance and the different products and options out there. I have just recently turned thirty and have started thinking seriously about the future and with that in mind I am hoping for a bit of advice. I may still go to a financial advisor but in the meantime hoping I could get some pointers on here from you more savvy PistonHeaders.
I currently have a stocks and shares ISA with on online platform (moneybox) which I put around £100-£200 a month into, at the minute this is all I can afford as my wife is on maternity but will increase over the next year or so. I also pay the max amount into my pension which is matched by my company.
I received an e mail today regarding the lifetime ISA from moneybox, my understanding is that this can be used as a savings tool for retirement? As long as I keep the money there until I am sixty it can then be removed tax free?
What is the general opinion on this lifetime ISA? Would it be a good option to have alongside my company pension and stocks and shares ISA? With the view to taking it out as a lump sum at retirement age and "living off" my company pension.
Sorry for the long winded post, would appreciate and advice and also if anyone is a financial advisor or can recommend one in the West of Scotland feel free to PM me, hopefully I could have a chat.
My understanding of the lifetime ISA is:-
You need to between 18 and 40 years old to start one. You can pay in up to £4,000 per tax year up until the age of 50. The government add 25% to your contribution, making your £4,000 into £5,000 before adding investment returns. You can only withdraw without penalty to buy your first house up to a maximum of £450,000 (I think) or upon reaching the age of 60. If you withdraw money at any other time there is a penalty of 25% (reducing your £5,000 to £3,750). If you need the money for reasons other than buying first property or after 60 you would be better off investing in an ordinary ISA.
I am not a financial adviser and not qualified in any way to give advice!
You need to between 18 and 40 years old to start one. You can pay in up to £4,000 per tax year up until the age of 50. The government add 25% to your contribution, making your £4,000 into £5,000 before adding investment returns. You can only withdraw without penalty to buy your first house up to a maximum of £450,000 (I think) or upon reaching the age of 60. If you withdraw money at any other time there is a penalty of 25% (reducing your £5,000 to £3,750). If you need the money for reasons other than buying first property or after 60 you would be better off investing in an ordinary ISA.
I am not a financial adviser and not qualified in any way to give advice!
A LISA, Pension and ISA are all investment "wrappers" offering different tax advantages, some on the way in, all on the returns once invested and some on the way out. They also vary in when you can get the money out of them.
The returns on whatever they're invested in are a function of whatever the investment is, which in the case of everything but a company pension scheme you have control over, and even in that case you can often pick from a range of funds.
If I were you I'd find or draw up a little comparison table comparing the tax treatment to pick the best investment wrapper, and then work on putting money into that.
I suspect that if you're a basic rate tax payer then the LISA is most tax advantageous, followed by the pension(but of course there's the company match there), followed by the ISA, but of course the money in an ISA is much more accessible.
The returns on whatever they're invested in are a function of whatever the investment is, which in the case of everything but a company pension scheme you have control over, and even in that case you can often pick from a range of funds.
If I were you I'd find or draw up a little comparison table comparing the tax treatment to pick the best investment wrapper, and then work on putting money into that.
I suspect that if you're a basic rate tax payer then the LISA is most tax advantageous, followed by the pension(but of course there's the company match there), followed by the ISA, but of course the money in an ISA is much more accessible.
Edited by xeny on Saturday 30th December 09:45
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