Lifetime ISAs

Are there currently any plans for dozens/Project Imagine to offer this product?

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currently? … no

is it on the roadmap? … yes

These are an interesting product that will definitely be considered, but the question is whether they are higher priority than other developments we might focus on. That, in a very large sense, is down to you and the demand.

From my perspective, the issue with LISA is that they have high penalties for exiting them for anything other than the limited conditions of the scheme. In that case they are something you need to leave, rather than manage.

Is this something people are very keen to have us look at? Do you already have them? I think that @Broadie03 and @Albatross mentioned these in the past

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Yes.

Short term savings are great for rainy days and everything. But I feel it is very important to have some money locked away for the long term that you cannot frivolously access.

Lifetime ISAs do have very high penalties for withdrawing early, this is why people should be strongly discouraged from putting all of their savings into their LISA, and encouraged to maintain emergency savings alongside it. However, these penalties also help the individual to focus in on the long term savings goals that money is intended for, in my opinion.

Besides… who doesn’t want free money from the government for saving towards their future? :stuck_out_tongue:

Anyway, there aren’t all that many providers offering a good rate on these right now, and as far as I’m aware, the top dogs in the arena don’t have the best tech offerings for the account (Skipton certainly don’t, type these 3 letters of your password and what’s the answer to this security question… and no app at all :fearful:).

Although, I do agree that the LISA is generally an account that you deposit into and leave to do its thing rather than needing to manage it.

I do indeed, as you alluded to :blush: I would love the ability to consolidate my savings more though. However, the interest rate would have to be at least competitive for me to consider switching.

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I have a S&S LISA with Nutmeg - I think that it’s becoming more of a talked about product (especially with first home buyers) but there isn’t a great deal of knowledge about them and not a lot of players actually providing products.

Dozens roadmap of “saving” and “investing” would match-up really well with a LISA offering imo.

But as you say the exiting fees are quite harsh and therefore really need to be thought about before opening a LISA.

If you need any more reasoning as to why I’ve gone for what I’ve gone for let me know!

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As @JustJordds mentioned, I agree that this could fit very well into the spend/save/invest journey that dozens are offering.

I currently have a cash LISA and intend to use it for a mortgage deposit in the short/medium term :crossed_fingers:. Not long enough term to risk using a stocks & shares LISA. Once I’ve secured a mortgage I intend to use S&S LISAs to top up what’s projected to be a pretty crappy auto-enrollment pension :older_man: . As a basic rate taxpayer there’s pretty much no advantage of investing in a SIPP over a LISA. If circumstances were extreme enough, a LISA would allow me to withdraw, albeit incurring significant penalties.

The plan:

  1. Get out of debt (if applicable).
  2. Stay out of debt.
  3. Save at least 3-6 months’ worth of expenses in cash as an emergency fund.
  4. Only use the emergency fund for emergencies!
  5. Save towards mortgage (where a cash LISA could fit in).
  6. Mortgage sorted :tada: , save 1% value of house in cash per year towards repairs and maintenance.
  7. Save towards holiday/renovation/new car/etc.
    Once 1 to 7 are exhausted, or not applicable
  8. Once employer contributions are maxed, if a basic rate taxpayer save into S&S LISA. If a higher rate taxpayer consider SIPPs.

Buy and hold seems to be a sensible strategy for long term, low fee, passive investments intended for use in retirement. Will dozens be offering a strategy that tracks the global market as a whole?

Disclaimer - this post does not contain financial advice.

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It’s not the end of the world for me if you didn’t offer it but it would be nice to have it all under one account.

Also what I like about my LISA is there is a lot of friction to prevent withdrawing. You get a warning message about the penalty, you have to ask customer services and it takes weeks to actually get the money. Encourages you to save and not take the money out on a whim.

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Definitely would welcome and transfer my Lifetime Isa onto this platform - would be great place to hold my LISA savings… and have a decent interest rate for a change! :money_mouth_face::grin:

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I have been looking at Dozens for the last few weeks and finally signed up for a card today.

I like the business model, customer focus and innovation and decided to sign up in support of the vision.

I joined this communities discussion to mention LISA’s! Dozens seem to pride itself in the financial journey from spender to saver to the investor. To guide people through that journey, Dozens needs to attempt to offer the best product type for the customer in each category.

For a millennial wanting to attain homeownership, saving that deposit is likely to be the primary financial target at some point in life. The LISA is a best in class saving (cash LISA) or investing product (S&S LISA) when it comes to buying a home due to the generous 25% government bonus to help meet this need.

So if Dozens wish to be the commercial vehicle that takes people on the spender to investor journey, the LISA is a must-have product during the ‘saving for a home’ phase. The alternatives are:

  1. To suggest customers save for a home using a different Dozens offering (not likely to be in their best interest given the 25% bonus)
  2. To accept a customer should use a different supplier (which goes against that start to finish dozens proposition).

For me, once I have a fully-funded emergency savings fund (3-6 month expenses) ill be moving onto the big goal…a home deposit! I don’t see myself in the minority here? In fact, shouldn’t a homeownership friendly product impact most people? Yes LISA’s have liquidity issues but not if they are used for their intended purpose and at the right stage in the financial journey.

To date, the LISA space has been pretty lacklustre; with low savings rates on the cash products and high fees/high initial investment on the s&s products. The poor incumbent offering arguably highlights LISA’s as an ideal target for the Dozens model to capitalise on.

I look forward to seeing Dozens making this a part of their offering and am excited to see how they can further innovate with regards to this product.

@AC What are your thoughts on this product class?

Cheers,
George

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Hi @Georgesamuel - is absolutely a great idea and well in line with our mission. Our immediate focus now is on continued growth of customers, balances and revenues and closing our Series A soon - with that behind us, we can commit to look at these new wrappers and even more differentiated financial products on the horizon.

Thank you for your custom, and do look out for our top of the line savings products coming soon.

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:eyes:
How soon?
Will crowdfunding investors be invited to the party?

Of course, there’s a risk that you put lots of money in a LISA, then for some reason DON’T buy a house with it, then you’re a bit stuck…

Then you can use the money for your retirement, so it can still be useful.

I think it’s a very uncomfortable mix though. The money you might consider putting into a house is not the same money that you’d automatically want to save for retirement. It’s pretty terrible if your plan changes

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Of course - they are an integral part of our fabric. We are looking at closing some time this year for an even more expansive 2020.

I agree… they would be a lot more attractive if you just lost the bonus if withdrawing early instead of losing some of what you put in yourself too. I think a cash ISA would be a better place to start for dozens anyway, especially if it’s a flexible ISA.