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I'm planning to get my first home next year and thinking to open a lifetime ISA account.

Can someone advise on these things please, still not quite sure:

  • Is there any minimum amount of money to transfer to LISA monthly to get the government bonus?

  • Do I transfer the money through Direct Debit or manually?

  • "Save up to £4,000 every tax year towards a first home?" What does it mean? The max transfer is £4000 to be eligible for the bonus?

  • I have instant cash ISA with Barclays, do I need to close my existing ISA account before applying for LISA?

  • I don't quite understand when I need to pay for my first home deposit, do I just transfer the agreed deposit amount to my LISA account? And also does it mean the bank will automatically withdraw from my LISA account too?

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  • No, there is no minimum limit to get the government bonus
  • How you transfer the money will depend on the platform, I am with Nutmeg and have set up a direct debit. When it first started however, I had to remember to log in and transfer the money
  • The maximum you can put in a LISA is £4000 a tax year. You cannot put any more in (although note if you have a partner, your ISA limits are separate i.e. £8000 per year). At this point, you will obviously get the maximum £1000 per year government bonus.
  • You don't need to close your other ISA. You can have as many ISAs of any type at any time, but you can only open one of each type and pay into a single one of each type per tax year.
  • I can't answer your last question as I didn't use my LISA for buying a house.

I'd highly recommend doing a significant amount of reading before investing in anything, you should definitely be using a LISA for buying a house, but make sure you understand them first.

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    When buying your first house, just tell your conveyancing solicitor “I have £X in a LISA which I’ll be putting towards the deposit”, and let them tell you what to do. – Mike Scott Oct 27 '20 at 11:25

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