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Learning, Sharing, and Teaching => Taxes => UK Tax Discussion => Topic started by: MrOnyx on May 02, 2018, 07:43:58 AM

Title: Your favourite provider of LISA?
Post by: MrOnyx on May 02, 2018, 07:43:58 AM
Hi guys, just a simple one this time:

Don't know how often this is discussed, but whom are your favourite providers of Lifetime ISAs?

I know they're pretty rare, and I've actually only found one so far (Onefamily) and their rates seem pretty high at least to me - they take 1% annual management charge, as well as 0.3% for "Investment expenses", and I'm not sure on the frequency of that. Is it just me or is that high?

If you max that out over a year, your £4,000 + £1,000 is being reduced by £50 every year. Meaning your actual max input per year is £3,960 + £990 (£4950). Obviously this is then multiplied by how many years you invest (it'll be a lot for me).

Maybe I'm thinking about it wrong, or maybe those numbers aren't as bad as I think they are. Whom is your favourite provider of LISAs - or, for that matter, ISAs - especially if you use more than one provider for these different accounts for a specific reason.
Title: Re: Your favourite provider of LISA?
Post by: frugledoc on May 02, 2018, 08:45:59 AM
That is very high.

I use Hargreaves Lansdown 0.45% capped at £45 per year for ETFs

It is a common myth that HL are expensive. As long as you donít buy funds they are very cheap
Title: Re: Your favourite provider of LISA?
Post by: MrOnyx on May 02, 2018, 08:54:14 AM
That is very high.

I use Hargreaves Lansdown 0.45% capped at £45 per year for ETFs

It is a common myth that HL are expensive. As long as you donít buy funds they are very cheap

Just looked them up. That's a much more sane sounding charge rate. So you're saying that they're good for ISAs and LISAs, but not for buying funds. So a worthy strategy might be to use HL for the ISAs, and then go somewhere else if, for arguments sake, you've managed to max out the £20k ISA allowance but still want to invest more in stocks/index funds.
Title: Re: Your favourite provider of LISA?
Post by: Runner5 on May 02, 2018, 02:03:13 PM
I use Nutmeg, but there seem to be a lot more providers available now than when they started last June. 0.75% fee which isn't the best, but I'm only keeping it for 3 years, and its more an exercise to get me used to variable returns and such.
Title: Re: Your favourite provider of LISA?
Post by: frugledoc on May 02, 2018, 03:15:33 PM
That is very high.

I use Hargreaves Lansdown 0.45% capped at £45 per year for ETFs

It is a common myth that HL are expensive. As long as you donít buy funds they are very cheap

Just looked them up. That's a much more sane sounding charge rate. So you're saying that they're good for ISAs and LISAs, but not for buying funds. So a worthy strategy might be to use HL for the ISAs, and then go somewhere else if, for arguments sake, you've managed to max out the £20k ISA allowance but still want to invest more in stocks/index funds.

No, just buy ETFs instead of funds.  If you are buy and holding long term there is no difference.  Index funds are no different from vanguard index etfs.
Title: Re: Your favourite provider of LISA?
Post by: londonstache on May 03, 2018, 01:48:01 AM
Another vote from me for Hargreaves. Not a fan of Nutmeg personally as I don't want someone making my choices for me.
Title: Re: Your favourite provider of LISA?
Post by: TartanTallulah on May 03, 2018, 03:42:58 PM
I also went for Hargreaves Lansdown when helping my son open his LISA. I like the user-friendliness of the platform.
Title: Re: Your favourite provider of LISA?
Post by: shelivesthedream on May 03, 2018, 09:45:27 PM
I've got a HL LISAand then a Vanguard ISA. I want an easy life so at the moment I just buy Vanguard LS100 in both.
Title: Re: Your favourite provider of LISA?
Post by: PropJoe on May 04, 2018, 12:08:47 AM
I use VG for my ISA and don't have a LISA.
For me it makes more sense to pay extra into my pension than to pay into a LISA, since I'm a higher rate tax payer. Also, under current rules my pension is available at 55, the LISA is 60.

LISA looks great for first time buyers though.
Title: Re: Your favourite provider of LISA?
Post by: frugledoc on May 04, 2018, 09:57:28 AM
I use VG for my ISA and don't have a LISA.
For me it makes more sense to pay extra into my pension than to pay into a LISA, since I'm a higher rate tax payer. Also, under current rules my pension is available at 55, the LISA is 60.

LISA looks great for first time buyers though.

If you can afford it, max out pension, ISA and LISA
Title: Re: Your favourite provider of LISA?
Post by: PropJoe on May 08, 2018, 06:00:29 AM
I use VG for my ISA and don't have a LISA.
For me it makes more sense to pay extra into my pension than to pay into a LISA, since I'm a higher rate tax payer. Also, under current rules my pension is available at 55, the LISA is 60.

LISA looks great for first time buyers though.

If you can afford it, max out pension, ISA and LISA

Alas I cannot, maxing pension is 40k alone.
Title: Re: Your favourite provider of LISA?
Post by: boyband on August 09, 2018, 03:13:19 PM
I just went with Nutmeg. It's a small part of our investments, and so I consider it a bit of diversification by it using a different strategy.
Title: Re: Your favourite provider of LISA?
Post by: UKstache on August 24, 2018, 08:51:14 AM
I'm using AJ Bell, seems fine, were the cheapest I could find.

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Title: Re: Your favourite provider of LISA?
Post by: Dgibs on November 09, 2018, 02:09:01 AM
Any updates on this - AJ bell Vs HL seems the 2 sane choices ATM.
Title: Re: Your favourite provider of LISA?
Post by: MrOnyx on November 09, 2018, 02:29:50 AM
Any updates on this - AJ bell Vs HL seems the 2 sane choices ATM.

Since starting this topic, I opened a LISA with HL. Got to say, I have no issues with it so far.

I can't fault them really. I DO hold my regular ISA with VG because of the reduced costs, and if they provided LISAs, I'd probably have my LISA with VG too, but alas they do not. I can't speak for other providers, though.
Title: Re: Your favourite provider of LISA?
Post by: Kookaburra Risotto on March 01, 2019, 05:09:28 AM
I also thought HL were expensive, happy to be corrected! Having said that I'll probably stick with my Nutmeg LISA for now as it's a pretty small part of my portfolio.
Title: Re: Your favourite provider of LISA?
Post by: paperclip on March 21, 2019, 04:54:21 AM
Yeah, I've also got a LISA with HL. No problems over the ~2 years I've been with them!

Open question: Why is the LISA rare to begin with? As far as I can tell none of the major banks offer it several years after its introduction, and most of my friends don't even know it exists.
Title: Re: Your favourite provider of LISA?
Post by: MrOnyx on March 21, 2019, 06:20:36 AM
Open question: Why is the LISA rare to begin with? As far as I can tell none of the major banks offer it several years after its introduction, and most of my friends don't even know it exists.

<speculation> Good question. It's obvious that they would have been hesitant to begin with, as they wanted to see how things went, to see if the LISA would be viable, but as you said, it has been a few years now. I can only guess that LISAs are difficult to provide for one reason or another, are not overly profitable to the major banks, or they just don't think the LISA will stick around - or, at least not in its current state. With such a turbulent government, one can only imagine that they'd be quite nervous about the rules possibly changing regarding LISAs in the future, or maybe they're concerned that LISAs could one day just be scrapped, leaving behind a mess for someone to clear up.
Title: Re: Your favourite provider of LISA?
Post by: paperclip on March 25, 2019, 06:03:13 AM
<speculation> Good question. It's obvious that they would have been hesitant to begin with, as they wanted to see how things went, to see if the LISA would be viable, but as you said, it has been a few years now. I can only guess that LISAs are difficult to provide for one reason or another, are not overly profitable to the major banks, or they just don't think the LISA will stick around - or, at least not in its current state. With such a turbulent government, one can only imagine that they'd be quite nervous about the rules possibly changing regarding LISAs in the future, or maybe they're concerned that LISAs could one day just be scrapped, leaving behind a mess for someone to clear up.

That could be it. The LISA also has harsher penalties for inappropriate withdrawal (compared to HTB), so perhaps banks aren't willing to deal with customer complaints. That's a shame really, because it seems superior to HTB in most other respects.
Title: Re: Your favourite provider of LISA?
Post by: Playing with Fire UK on March 25, 2019, 01:20:37 PM
I think the way the bonus and penalty works is ripe for complaints. The 25% bonus and 25% penalty on £100 => £93.75 seems counter-intuitive.