When will the lifetime ISA bonus be paid?
Today is ISA deadline day. That means that if you want to be eligible for the generous lifetime ISA bonuses on offer from the government for the 2017/18 year, time is running out. By midnight, it will be too late.
The lifetime ISA is a new investment vehicle that was launched last year. Open to those aged 18-39, investors can contribute up to £4,000 per year, up to age 50. The advantage of this ISA is that not only is it a tax-free vehicle, but for every pound you invest, the government will pay you a bonus of 25%. In other words, invest £1,000 and you'll receive a £250 bonus. Invest the full £4,000, like I did recently, and you'll receive a £1,000 bonus.
The only catch is that any funds placed within a lifetime ISA need to remain there until either you buy your first property (there are quite a few conditions to be aware of here) or turn 60. Withdraw your funds before that and you'll be stung with hefty penalties. This means the vehicle is significantly less flexible than a standard stocks & shares/cash ISA. As a result, it won't be suitable for everyone.
Yet, a 25% risk-free return on your capital is an attractive proposition, so shouldn't be ignored if you have capital that you're willing to either invest for retirement or put towards a house deposit. Over time, regular investment bonuses could really propel your savings. And the good news is, you won't have to wait long to receive the lifetime ISA bonuses either. Here's a look at when bonuses will be paid.
Hargreaves Lansdown states on its website that it will claim the bonus for the 2017/18 tax year this month and that investors can expect to see it in their accounts by 4 May. However, after that, Hargreaves will claim the bonus "as soon as possible" each month. As a result, from the 2018/19 tax year onward, investors will receive their bonuses four to nine weeks after the end of each month.
AJ Bell has advised that it will receive the bonus on or around 24 April and from there, it will be distributed to clients "very quickly." The investment manager has not given a specific date as to when clients can expect to receive the funds though.
Nutmeg says that it will apply for the 2017/18 government bonus from tomorrow (ie 6 April) and that it will keep customers informed of the progress of payments. The online investment manager states on its website that after April, the bonus will be paid monthly.
Lastly, The Share Centre has stated that bonuses will be paid directly to the cash section of investors' accounts "as soon as possible after received."
So, the key takeaway here is that lifetime ISA bonuses are likely to be paid in the next month or so. It won't be a long, protracted wait. That's great news for investors, as it means the extra capital can be put to work sooner rather than later.
Of course, picking the right shares and the strategy to be successful in the stock market isn't easy. But you can get ahead of the herd by reading the Motley Fool's FREE guide, "10 Steps To Making A Million In The Market".
The Motley Fool's experts show how a seven-figure-sum stock portfolio is within the reach of many ordinary investors in this straightforward step-by-step guide. There are no strings attached, simply click here for your free copy.