Lifetime ISAs are still relatively new so there are not that many providers. You can find a list in this Lifetime ISA Guide and compare them. There are five places you can get a stocks and shares LISA: AJ Bell Youinvest, Hargreaves Lansdown, Nutmeg, The Share Centre and Moneybox. AJ Bell Youinvest and Hargreaves Lansdown both offer extensive investment choice. Nutmeg and The Share Centre are better for beginners.
It’s worth considering how long you plan to invest the money, to help you decide if you should invest in cash options or stocks and shares. If you have a longer time available to save and you are prepared to take the risk that your money may go up and down by investing in stocks and shares, it may be worth considering if a Stocks and Shares Lifetime ISA would be better suited to your plans.
To break it down: typically the shorter the term of a stocks and shares investment and the fewer actual shares you're investing in, the greater the risk. Investment funds have different levels of risk and you would need to consider what you are prepared to lose if you do choose to invest it. Regardless of the investment fund, stocks and shares investments will go up and down and if you have a specific time period in mind and your investment is down when you need to withdraw the money to buy, you would be potentially drawing the funds during a period of loss. However on the other hand, savings interest at the moment is earning less than inflation, which means money sitting in cash is losing value every day. To give you an example: if you are earning 1.00% in interest in a savings account and the cost of living is rising by 2.50% then the value of your savings effectively reduces in real terms by 1.50%.
Have a think about your own circumstances. When are you looking to buy? You need to be under 40 to open a LISA. By investing in a Stocks and Shares Lifetime ISA you would potentially help your money grow by much more than inflation but are you prepared to accept that there is a chance it may lose money? What would it mean to your goals of buying? The Lifetime ISA provides you with a bonus of 25% regardless of it being Stocks and Shares ISA or a cash Lifetime ISA and allows you to save up to £4,000 per year, so I would suggest comparing the advantages and disadvantages of both and considering this carefully to help you with your decision.
I hope this helps!
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