If you’re looking that long term, then you’re probably angling at using it for retirement, given the withdrawal penalty. Try comparing pension and LISA in that case.
What can we do to get LISAs on the roadmap?
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In that case also when withdrawing for Pension only 25 % is taxfree, remaining 75 % you will pay income tax, where as LISA i believe 100% is TAX FREE if you can wait for retirement age.
Each one has its own benefits depending on individual circumstances.
My analysis is not an alternative to Pension(For pension any way you get tax relief on income) .
My analysis is only about doing the same investments via normal Shares and Stocks ISA and LISA Shares and STocks ISA .
Pension is 25% tax free on the exit, meaning that you have more capital to accumulate in the first place (losing £80 of cash today means £100 goes to your pension pot if your are a basic rate tax payer. £60 for £100 for higher rate) and you have some relief at the withdrawal stage.
With LISA, not only you pay 100% tax on day one (thus reducing your growth potential compared to the pension), but you are also exposed to further NI contributions, hence gross pay of £100 can go down as low as net £68 (but if your company doesn’t offer salary sacrifice, then the NI point is irrelevant).
If your employer does not offer salary sacrifice and you never step into the higher rate band - only then LISA would be palatable: £100 gross turning into £80 net, turning into £100 with the LISA bonus, then 100% tax free (pension, on the other hand, would be £100 gross turning into £100 net, then 25% tax free - slightly worse off).
However, in any other scenario you are more likely to be worse off. For example, with LISA on a higher rate: £100 gross turning into £60 net, turning into £75 with the LISA bonus growing at 5% for 30 years = £325 (pension would be £100 gross turning into £100 net, growing at 5% for the same period = £432, of which £108 is tax free and further £324 is taxed at your respective tax rate, starting with the use of your personal allowance [if that concept will not disappear], meaning that you will only be worse off if your effective rate of tax is 33% of more).
LISA is certainly a controversial long-term solution and the less the earnings are, the more sensible the use of LISA is. At a higher rate, especially [with current tax rules] beyond a salary of £100,000, pension is the most efficient saving vehicle that exists in the UK, hence the use of LISA can only be justified on significantly lower levels of income.
I need to learn how to write concisely 
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true, but if you’re talking a deposit for a house…
you can’t go wrong with £1000 a year extra
also if you manage to max out pension contributions one year, a LISA is a good option
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Oh, that is indeed a no-brainer if you go with low-risk assets (bonds/treasuries), I only argued the point of LISA as a long-term solution for later life 
Well… You can carry back your contributions for up to three years and only if you have maxed them out (the lower of [1] your annual salaries [2] £40,000 this year and £120,000 in those years), only then LISA is indeed the next-best tool. That is a very lovely problem to have though 
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If only I wasn’t too old 
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I fell in this scenario and for me this is a safe bet as Second Pension or if i need lump sump at once in later life.
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What do you mean here?
HL’s blog has a decent explanation:
Generally, the most you can pay in to your pension each tax year is £40,000.
But carry forward lets you take advantage of any unused allowance from the previous three tax years. That’s up to £40,000 from each year.
Including the current tax year, that could mean you are able to make a pension contribution of up to £160,000 and receive tax relief.
In a nutshell, if you have a significant raise/bonus/windfall, you can max out this year’s and last three years’ pension contributions, which can be as much as £160,000. And a better example:
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Love this! Will add that the numbers skew even more heavily in favour of a pension when you take into account student loans (which are more relevant to the younger people on this thread on plan 2 loans, that you’re likely not going to pay off for the whole 30 years), so salary sacrifice saves you another 9%, that you likely won’t pay on pension withdrawal.
Indeed, the most striking example I have is someone on a plan 2 student loan earning £104k, he can either take £4k, pay 71% (40% income + 2% NI + 9% student loans + 20% from personal allowance missing) and get £1,160, boosted up to £1450 in a LISA, or put £4k in a pension, then get 25% tax free on withdrawal, with the rest being withdrawn at their marginal rate (not including student loan) and if post-state pension age, then without NI, not to mention the additional returns resulting from compounding on the higher figure, although there is the matter of the LTA to think about.
In that case, a pension is “245% boost”, compared to a “25% boost” from a LISA.
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Do Freetrade plan to offer a lifetime ISA product? I have a LISA that I would like to transfer in if the product was available
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Hi
You can vote for it in this thread
I did and can’t wait for it
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Many thanks, I voted hope it gets on the development list.
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Wish they would!
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It would be amazing!
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Each for their own. In my view LISAs are a great investment vehicle. It is not for everyone, but there are many people on here who have S&S ISAs and have plans to live off the dividend income of their investments and do not plan to even access it until way past their retirement. I don’t see why I shouldn’t take the 25% bonus from the government in that scenario.
Now if LISA was available on a platform like FREETRADE then the added benefit for me is that I can actually choose which stocks I want to invest my money in whilst getting that added bonus from the government and not have to worry about the nuances of ‘getting 25% tax free and paying tax on the 75% as it’s treated as an income’. It is all down to choice. I find it churlish that someone would simply say one investment vehicle is better than another. It really all depends on everyone’s individual circumstance and preference. We’re not financial advisers and if you were, you’re not getting paid for giving one.
What really matters is that the choice is available FOR THOSE WHO WANT IT to use LISAs or SIPPs. But to force one on people over another is simply disingenuous.
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I am using AJ Bell for my LISA at the moment…would love to use freetrade! Common get it.
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A Lifetime ISA on a free trading platform would be fantastic. Bit of a workload for FT though, solicitors requesting funds constantly, funds being returned when purchases fall through etc.
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