[Feature Request 🔧] Lifetime ISA (LISA) 👶🏻👵🏾

The 25% processing part should be similar to a SIPP, it shouldn’t cost them much more to add such a feature? The part about solicitors would make sense though.

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Just to say that recently I was sent an in-app message from Freetrade asking me to answer a few questions about LISAs… so clearly someone is thinking about it if they are doing research like that.

Meanwhile my ISA is now at £31k (with a £1k bonus pending) and since I only do funds with HL I am starting to get hammered monthly for fees (£12 a month and will keep rising as the portfolio increases). Let’s just say even if Freetrade were to do it for 0.25%, or a flat £9.99/month as Plus now, I’d be all over it, and surely others out there will be too?

Like @CashCow above, I too am not putting anything more in my Freetrade S&S ISA as the LISA is always my priority and there’s not much left after that. Again, there must be others who think this way.

I agree with others above though that maybe the thought of allowing withdrawals for house purchases is perhaps the kicker that’s putting Freetrade off. A lot of hassle they don’t need. But perhaps charging that monthly fee will ensure that people who are saving for houses will look elsewhere at the free LISA Cash products available?

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Switch your fund out to an ETF, it’s capped at £45 a year

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I personally wouldn’t pay more than £5 per month for a LISA. Because I use an ETF, currently my fees are capped at £3.50 per month with AJ Bell, and I trade once per month for £1.50 using the regular investing feature (I deposit 1/12 of the annual limit each month). I think £3 per month would be a good balance.

I would like to be able to trade as soon as I deposit and as soon as my bonus comes in each month, but it’s not something I’d pay more for. If anything, having to wait for regular investing day smooths out my pound cost averaging by forcing 2 trades per month (one ISA, one LISA), so my main motivations for switching would be to save money and consolidate under one provider.

As for the additional expense of dealing with conveyancers, realistically, very few people should be investing their house deposit savings anyway. Perhaps FreeTrade could say that it’s only a retirement savings account and not allow withdrawals for a house purchase, although the government probably don’t allow this :man_shrugging:t2:

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Unifying all tax wrapped savings account for one fee, you just choose your flavour, would keep the offering simple. £3 - £5 a month a you choose which one you want LISA, ISA or JISA (or JSIPP!).

This is what I’m now looking at, utilising the regular investing option with a 1.50 fee per trade. Around 15k looks like the break even point if you are happy to set up the direct debits for the year and not add in on an ad hoc basis.

Utilising VRRP in the hope that Freetrade will one day support in specie LISA transfers.

That or you can switch your current fund to an ETF and then new contributions are paid into a fund again until it hits the point where it’s cheaper to switch it to the ETF. And repeat

That makes things less appealing unless I have my maths wrong?

Pay the extra 0.45 percent on the regular contributions into the fund but don’t pay the 1.50 regular dealing fee. When you come to switching the fund over to the etf you will have to pay the regular dealing fee which is what £11.95?

It will be a different number for everyone, depending on how much your investing, how often, etc. I think if your investing over £330 in one fund then it costs the same amount to invest in an ETF in the first month (and cheaper every month after). roughly (I think that’s completely wrong actually, my brain isn’t working today. its 0.45% over a year, so your need to invest much higher to come to the sam amount. and include the £12 buy etc.)

Anyone got a recommendation for the best value stocks and shares LISA?

I use HL. Fees are higher than likes of Freetrade but I minimise then by using direct debit purchases and keeping my trade volume low (build up in FT/T212 then sell/re-buy when large enough to justify the fees)

I also use HL. Fees for ETFs are capped at £45 annually and I only make one trade a year (£5k worth of VWRL) so it’s £57 in total. I think that’s decent value for a full-service broker.

AJ Bell is cheaper for most use cases but I’ve never liked its platform.

Its ‘Dodl’ app is cheaper again. If you were to invest in HSBC’s All-World Index fund, for example, you’d pay a 0.13% ongoing fee for the fund plus a 0.15% platform charge (subject to a £1 a month minimum).

A total cost of 0.28% is going to be difficult to beat until you have £20-30k and a flat fee makes sense.

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Just about to finish topping up this year on HL and switching it all out to an ETF.

Switching to VWRL so hopefully when Freetrade announce the LISA I will be ready to go.

Need to wait and see if Freetrade can offer the LISA for less than £57 a year, I think this is the main reason it is down the priority order, there are other easier revenue streams than this. If you think about the added admin of needing to request and process the LISA bonuses is it going to be profitable for Freetrade?

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That 0.13% is an OCF. You would have that anywhere including on Freetrade and the HL example you gave in the first paragraph. I know you know and understand this but many new investors on Freetrade don’t … we see questions coming up again and again about this.

So to anyone reading this and thinking that they have to pay an additional 0.13% ‘on going fee’ to the broker … no you don’t … these are the investment costs of the fund manager which get embedded into the share price … not additional new money you have to fork out of your pocket … and they would be the same no matter which broker you go to.

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Yeah, the other option to minimise trading fees is to top up index funds regularly (e.g. Vanguard ESG Dev World All Cap) then sell/buy ETF when the platform fees reach the level they are capped on ETFs. Index trades are free, albeit with a bit spread.

Allows you to average without incurring the regular trading fees.

Agreed. Can’t see a huge amount of profit in it.

Thanks. I’ve amended to make that clearer. While we’re nitpicking (sorry, I can hardly help myself)…

OCF stands for ‘ongoing charges figure’. I know you know that but, by the same token, it might be best to spell out acronyms for beginners. As you say, that fee applies anywhere but it’s worth noting that FT doesn’t offer funds like the HSBC one referred to and, as far as I’m aware, has no plans to.

It’s worth adding that some offer discounts. While the OCF is the same, the net fee is not. For example, Baillie Gifford Managed costs 0.24% on HL and 0.42% with most other brokers (before platform fees).

I think you are right … this is big deal. When Share centre was absorbed by II, II transferred 83,000 accounts to Onefamily for a reason.

I was looking at the HMRC stats and it made me realise that they would also have to daily process withdrawals for house purchases and then all the processes need to be in place to identify incorrect withdrawals and so on and so forth.

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I hope it’s low on the list of priorities. May be convenient for some, but lots of admin involved on relatively low value accounts that majority will eventually be redeemed for property purchases. Not an ideal target for AuM growth.

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I’m now 75% full for the year over there. Cow damn it, this should have been on your AUM total Freetrade!

I’ve also noticed that DooDoo by AJ Hell supports LISA transfers - there aren’t many providers that do that.

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