Share Centre LISA customer? Transfer to a new provider now if you don't want your savings moved to OneFamily and invested
Share Centre Lifetime ISA (LISA) customers will see their accounts transferred to OneFamily in July, while any cash currently held will be automatically invested. If you don't want to move to OneFamily or have your savings automatically invested, you need to request a transfer to a new provider as soon as possible.
The move comes after investment firm the Share Centre was purchased by investment platform Interactive Investor (ii) last year. But as ii doesn't offer LISAs, it's decided to transfer Share Centre's 1,500 stocks & shares LISA accounts to financial services provider OneFamily. Any cash savings held within these stocks & shares wrappers will also be automatically invested when accounts are moved to OneFamily.
LISAs can be taken out to save in cash or to invest in stocks and shares. With a LISA, you can save up to £4,000 a year towards your first home or retirement and it gives you a 25% cash bonus of up to £1,000 a year on top. In addition, any interest you earn or returns you make are tax-free. But you're charged 25% of the amount withdrawn if you take cash out before you turn 60 and you're not buying a property.
Both Share Centre and OneFamily's stocks & shares LISAs have been among our best buys in the past, although they're not currently top picks. For more info on how LISAs work, as well as our current top picks, see our Lifetime ISAs guide.
All Share Centre LISA customers will have accounts moved to OneFamily and savings reinvested
Here's what the move means for Share Centre customers:
- Invest through your Share Centre LISA? Investments will be sold and reinvested in one of two OneFamily funds. Unless you transfer out, any investments you had in the three funds Share Centre offers will be sold on 28 June. The money will then be reinvested into one of the two funds OneFamily has available. OneFamily says you'll be moved to the fund that most closely aligns with the Share Centre fund(s) you held.
- Hold cash in a Share Centre LISA? This will be invested into OneFamily's 'Global Mixed' fund. This means you'll hold a mixture of company shares and fixed interest investments; the value of these can fall as well as rise. So you need to consider carefully whether this is the right option for you. ii says 600 customers currently hold all of their Share Centre LISA savings in cash.
In both scenarios, as this move is a transfer, it won't eat into your annual LISA allowance of £4,000.
Compare fees and investment options to decide whether to stick or switch
Share Centre currently charges ongoing fees (which includes both platform and fund fees) of 1.5% to 1.64% on its stocks and shares LISA, depending on which fund(s) you hold. In comparison, OneFamily's ongoing fund fees are 1.13% to 1.17% – up to around 0.5 percentage points lower.
So depending on which funds you had with Share Centre, you could see the fees you're charged drop significantly. However, your total returns will still depend on the performance of the underlying investments.
Don't want to switch to OneFamily or have your cash invested? You need to transfer out
If you don't want to move to OneFamily or you don't want to invest and would prefer to keep your LISA savings in cash, you'll need to request a transfer to a different LISA provider. To do this, you need to make a request to switch to your chosen new LISA provider and it will do the work for you. For our top picks, see our Lifetime ISAs guide.
You won't be charged for this but ii says it needs to receive transfer instructions from your new provider by 18 June. You'll still be able to transfer fee-free after you've been switched, but it won't be in time to avoid the move to OneFamily, so any cash holdings will be invested temporarily.
Also be aware that stocks & shares LISA transfers can take up to 30 calendar days, though it varies by provider. So if you're thinking of transferring, it's worth putting in the request with your chosen new LISA provider as soon as possible (and checking that it will be able to send the transfer instructions to ii before 18 June).
DON'T just withdraw the cash though – if you do, you'll be subject to the usual 25% LISA withdrawal penalty (unless you're withdrawing it for a first home or retirement) and you'll lose the lasting tax benefits.
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