Are there currently any plans for dozens/Project Imagine to offer this product?
currently? … no
is it on the roadmap? … yes
These are an interesting product that will definitely be considered, but the question is whether they are higher priority than other developments we might focus on. That, in a very large sense, is down to you and the demand.
From my perspective, the issue with LISA is that they have high penalties for exiting them for anything other than the limited conditions of the scheme. In that case they are something you need to leave, rather than manage.
Short term savings are great for rainy days and everything. But I feel it is very important to have some money locked away for the long term that you cannot frivolously access.
Lifetime ISAs do have very high penalties for withdrawing early, this is why people should be strongly discouraged from putting all of their savings into their LISA, and encouraged to maintain emergency savings alongside it. However, these penalties also help the individual to focus in on the long term savings goals that money is intended for, in my opinion.
Besides… who doesn’t want free money from the government for saving towards their future?
Anyway, there aren’t all that many providers offering a good rate on these right now, and as far as I’m aware, the top dogs in the arena don’t have the best tech offerings for the account (Skipton certainly don’t, type these 3 letters of your password and what’s the answer to this security question… and no app at all ).
Although, I do agree that the LISA is generally an account that you deposit into and leave to do its thing rather than needing to manage it.
I do indeed, as you alluded to I would love the ability to consolidate my savings more though. However, the interest rate would have to be at least competitive for me to consider switching.
I have a S&S LISA with Nutmeg - I think that it’s becoming more of a talked about product (especially with first home buyers) but there isn’t a great deal of knowledge about them and not a lot of players actually providing products.
Dozens roadmap of “saving” and “investing” would match-up really well with a LISA offering imo.
But as you say the exiting fees are quite harsh and therefore really need to be thought about before opening a LISA.
If you need any more reasoning as to why I’ve gone for what I’ve gone for let me know!
As @JustJordds mentioned, I agree that this could fit very well into the spend/save/invest journey that dozens are offering.
I currently have a cash LISA and intend to use it for a mortgage deposit in the short/medium term . Not long enough term to risk using a stocks & shares LISA. Once I’ve secured a mortgage I intend to use S&S LISAs to top up what’s projected to be a pretty crappy auto-enrollment pension . As a basic rate taxpayer there’s pretty much no advantage of investing in a SIPP over a LISA. If circumstances were extreme enough, a LISA would allow me to withdraw, albeit incurring significant penalties.
- Get out of debt (if applicable).
- Stay out of debt.
- Save at least 3-6 months’ worth of expenses in cash as an emergency fund.
- Only use the emergency fund for emergencies!
- Save towards mortgage (where a cash LISA could fit in).
- Mortgage sorted , save 1% value of house in cash per year towards repairs and maintenance.
- Save towards holiday/renovation/new car/etc.
Once 1 to 7 are exhausted, or not applicable
- Once employer contributions are maxed, if a basic rate taxpayer save into S&S LISA. If a higher rate taxpayer consider SIPPs.
Buy and hold seems to be a sensible strategy for long term, low fee, passive investments intended for use in retirement. Will dozens be offering a strategy that tracks the global market as a whole?
Disclaimer - this post does not contain financial advice.
It’s not the end of the world for me if you didn’t offer it but it would be nice to have it all under one account.
Also what I like about my LISA is there is a lot of friction to prevent withdrawing. You get a warning message about the penalty, you have to ask customer services and it takes weeks to actually get the money. Encourages you to save and not take the money out on a whim.
Definitely would welcome and transfer my Lifetime Isa onto this platform - would be great place to hold my LISA savings… and have a decent interest rate for a change!