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Meet LISA – the new account for spring chickens

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But as always there are some terms and conditions. You need to use the money either to buy a first house (and there’s no wriggle room on this) OR lock it away until you are 60. If you change your mind about buying a house or Great-Aunty Ethel leaves you her flat, then the exit penalties will see you out of pocket unless you leave the money in the LISA until you’re 60.

Lifetime ISAs are a great idea for anyone who has not owned a home before and is dead set on buying one. The Government bonus of 25% will add up to £1,000 a year if you pay in £4,000. Are they a good pension substitute? Not if you’re an employee (‘cos you get your boss’ contributions on top) and especially not if you’re a higher rate taxpayer (you get great tax relief on pensions which effectively get you £1 for 60p. Even basic rate taxpayers only pay 80p to get £1 in a pension ‘cos of tax relief.)

We’ve got a straightforward factsheet here which compares Help to Buy ISAs against Lifetime ISAs and gives you some simple rules of thumb.

**Parent alert** – if your kids are saving for a house could you encourage them to set one up and pay in at Christmas and birthdays and whenever else it is you get stung!? ** Trust Fund Kids alert ** – the LISA contribution of £4,000 does count towards the annual ISA allowance of £20,000 – and you can’t use a LISA to build your property empire – no buy-to-let allowed.

Today there are only 3 places you can get one – Hargreaves Lansdown, Nutmeg and The Share Centre. HMRC fannied about and didn’t finalise the rules until very close to launch date – so we should see providers come to market before long. Nutmeg and Hargreaves Lansdown are the cheapest options today from 0.64%-0.67% respectively (Nutmeg ‘fixed allocation’ portfolios; Hargreaves Lansdown 0.45% admin fee plus a cheap, ready-made ‘Vanguard LifeStrategy’ investment fund from 0.22% which is a decent starter option.)

That’s all this week. Have a lovely Easter everyone. A final money tip – Sainsbury’s Online has 50p off Lindt choc bunnies – a 200-gram thumper is yours for £3. Happy days.

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