Worth changing LISA from Skipton (0.10%) to Moneybox (0.85% then 0.5%) or Nottingham (0.8%)?

[taylordoss]

I have just started to get on board with putting money to in my cash LISA to the point where I aim to put in £4000 before the end of this tax year, giving me £5k with my government bonus. I aim to continue topping up the maximum for the next 2-3 years when I should be in a position to buy a house.

The interest rate with my current provider Skipton is a laughable 0.10%. Moneybox offer 0.85% for the next 12 months, then drops down to 0.5% and Nottingham offer a solid 0.8%

Provided I put in my max contributions each year, I've worked out that Skipton would give me £50.05 interest up until 2025, Moneybox £269.02 and Nottingham £403.21, provided that none of them change their interest rates.

I see that I have 3 choices, I guess.

1. Stay with Skipton. It's already set up, easy. No need to worry - apart from losing out on a nice little bit of potential interest.
2. Move to Moneybox, get the 0.85% this year. Then move again possibly to Nottingham once the MB rate drops to 0.5%
3. Move to Nottingham now, don't worry about the extra 0.05% from MB, it's not worth the hassle to keep moving.

• Can you move your LISA as many times as you want, just like a normal bank switch? Or is it restricted per tax year?
• Should I wait to move until the new tax year? I aim to put in my 4k at the end of this month but I'm worried that switching may take longer and make it impossible to get this year's HMRC bonus.

Any suggestions or experiences would be really gratefully received.

 

[inquiringmind]

@taylordoss Just as a PSA, Skipton delayed my house purchase for a month with the LISA. Start doing the paperwork early, before you get a completion date. Doesn't help that my conveyancer wasn't familiar with the process.

They don't like giving you your money back!

 

[dshort]

@taylordoss On a related note, does anyone know if switching to a new LISA resets the 12 month clock? As LISAs need to have been open for a year before they can be used for a house purchase

 

[americanbear]

@dshort It depends if you transfer your LISA or not. If you transfer then the clock carries over, if it is a separate one the clock resets. Note that not every provider lets you transfer after opening, I learnt this the hard way.

 

[ronv]

@taylordoss

Can you move your LISA as many times as you want, just like a normal bank switch? Or is it restricted per tax year?

No restrictions on the number of transfers.

Should I wait to move until the new tax year? I aim to put in my 4k at the end of this month but I'm worried that switching may take longer and make it impossible to get this year's HMRC bonus.

You would get the bonus either way. Even if it were unpaid at the point of transfer, your new provider would claim it from HMRC and give you it.