So, lets say you're thinking about transferring your Lifetime ISA to Nude. You probably have a ton of questions like, how does it work? How long does it take? And what do you have to do? 💬
We're here to explain how to transfer your Lifetime ISA (hint – it's totally hassle-free) so you can learn all about how it works, and we'll also answer some of our most frequently asked questions along the way.
Why would you transfer your Lifetime ISA?
There are a whole bunch of reasons!
Starting with money: you might be looking for a better interest rate if you have a cash Lifetime ISA (ours is 3.8% AER right now, in case you were wondering...), or if you have a stocks & shares Lifetime ISA you might be looking for a fund that matches your views on sustainability (like ours, which is invested in an ESG fund).
Or, you might just want a different experience in saving for your first home. Like an app that brings together personalised money-saving ideas, spend analysis, the ability to Team Up with the person you're wanting to buy with, giveaways, learning about the whole homebuying process, gift links and more. Phew! That's us, btw.
Are you allowed to switch Lifetime ISA providers?
You sure can – it's your money, after all. People generally take years to save for their first home, and you don't have to stick with the same provider for that entire time. Just like with current accounts, the one you choose at first might not be the one you want to stick with for the long term.
What happens when you switch providers - does it affect when I can buy my first home?
Nope! Quick refresher: You have to have your Lifetime ISA open for 12 months before you can use it penalty-free to buy your first-home (that's under £450k, in the UK, bought with a mortgage, and bought to live in).
But luckily, that timer doesn't reset if you switch providers. Transferring doesn't change that date. It stays the same = 12 months from when you first opened your Lifetime ISA.
How do you do the actual transfer - is it complicated?
The process varies for each provider, but let us tell you about how it works here at Nude...
- You sign up via our app in the normal way, and we'll ask you if you have a Lifetime ISA already.
- If you say yes, and you want to transfer, we'll email you a digital form.
- You fill that in (you'll need to know your current providers' details and your account details) and sign it. It's all digital, no pen or paper required.
- We then take care of the rest, and get the money from your current provider over to your new account with Nude. This can take 2-6 weeks, depending on how speedy they are!
How long does it take for the transfer to complete?
Around 2-6 weeks – once we do the paperwork at our end, your provider then has to transfer the funds. Some are quicker than others, but your money stays safe and secure throughout the process. We'll drop you an email when you're all set, and you'll see your money in your account in the Nude app.
What if I've got a Lifetime ISA with more than £4,000 in it. Can I transfer it all at once, or would that mean I went over the annual allowance?
If you're doing a Lifetime ISA to Lifetime ISA transfer, you can transfer your entire balance in one-go. So whatever you have: £20 or £20,000 (or more if you're really into the savings game) comes with you, no problems.
Here are some examples...
Example #1:
You had £10,000 in your LISA before April 6th 2022 and haven’t paid anything in since. You can transfer the full £10,000 with no 25% government withdrawal charge. You can also save or invest up to £4,000 into your Nude Lifetime ISA this tax year.
Example #2:
You had £8,500 in your LISA before April 6th 2022. You paid £1,500 into your Lifetime ISA since the beginning of this tax year (April 6th). You can transfer the full £10,000 with no 25% government withdrawal charge. You can also save or invest up to £2,500 into your Nude Lifetime ISA this tax year. That’s £4,000 – £1,500 = £2,500.
(Get 6th April down as a date in the diary – it's when your annual allowance resets and the brand new tax year begins ⏰)
I have a Help to Buy ISA but I want to transfer to a Lifetime ISA. Can I do that?
You can move the money you've saved in your Help to Buy ISA over to us, but it's technically not a straight up transfer because they're different account types. You can only move the money over at a rate of £4,000 per tax year aka the Lifetime ISA's annual allowance. Check out our blog on the differences between a Help to Buy ISA and a Lifetime ISA.
I have a regular Stocks & Shares ISA elsewhere, but I want to transfer that to a Lifetime ISA. Is that possible?
Okay, so it's not a Lifetime ISA, so again this won't be a straight up transfer. You'd have to move funds across like with a Help to Buy, at a rate of £4,000 per tax year to fit with the Lifetime ISA allowance. Remember to take into account your overall ISA allowance (£20,000 per person, per year), as you can't go over that. If this sounds like you, check out Money Helper – the government's free impartial advice service for all things finance.
Can I transfer my Stocks & Shares Lifetime ISA with another provider to your Cash Lifetime ISA?
Yup! The same sign-up process that we explained above will apply to you, too. It also works on the flip side, like if you have a cash one elsewhere but want to switch that to a stocks & shares one when you transfer.
I have BOTH a Lifetime ISA, and a cash ISA. Can I transfer them both to Nude at the same time?
We can only transfer the Lifetime ISA – as it's the same product to product switch. Cash ISAs (not Lifetime ones) are different though, so if you wanted to move the funds you have in there over to your Lifetime ISA, you can take money out of your ISA and stick it in your new Nude Lifetime ISA once it's all set up if you want to. It's not a straight up transfer.
Remember, you can only put £4,000 into your Lifetime ISA each year. So if you've already used up some of that allowance, that follows you to your new provider.
It also means you can only move money from another ISA product (like your cash one) to your Lifetime ISA at a max of £4,000 per tax year, taking into account any allowance you already used up by adding directly into your Lifetime ISA.
The new tax year starts - and the allowance resets - on the 6th April every year, FYI. We hope that makes sense, but if you still have questions about moving your money from an ISA to a LISA, you should check out our help guide.
Want to find out more? Check out these links...
We put Help to Buy vs Lifetime ISAs head-to-head here
Our guide to Stocks & Shares vs Lifetime ISAs to help you decide
Our help guide to transferring a Lifetime isA
Get more info about our Lifetime ISAs