Source
r/UKPersonalFinance•
RonWizard

Lifetime ISAs - worth it if planning on buying in less than a year?

As title says, really. Me and my partner are looking to purchase a first home relatively soon - is it worth us opening LISAs or would we need to have the accounts for over a year to use the funds?

I'm leaning more towards waiting until the stamp duty holiday ends before we purchase anyway as our budget is pretty limited and we live in Bristol, but if we opened them today would we have to wait until next September to get our bonuses?

Posted Sep 15, 2020, 2:36 PM UTC

212
keynote20172•

Yes. You have to wait a year to use the bonus. If you take the money out before 12 month you would usually incur a penalty but atm due to covid this has been removed effectively.

3
RonWizardOP0•

!thanks

Sorted! Won't bother then, i guess!

2
[deleted]•

[deleted]

1
RonWizardOP0•

My concern is that if we end up completing the house buy between April and September we'd lose money

0
DorothyJMan10•

You'd lose 6.25 pence...

3
TheFOMaster2•

I'd open up with a £1 now to get the ball rolling. In March you can review again and if you think a purchase is definitely going ahead in those six months then just close the LISA. But if plans change then you have it open for up to a free £2k for any purchase after September.

Might as well have it open and decide later.

1
[deleted]•

[removed]

1
IxionS3441•

Any withdrawal from a LISA within the first year is subject to the withdrawal penalty.

This tax year the penalty will be 20% of the sum withdrawn which will wipe out your bonus. From 6th April it is expected it will go back to the normal 25% penalty, which will wipe out your bonus plus about 6%.

So no, if you expect to buy within a year a LISA is not a good proposition for you.

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