ISAsApr 4 2017

Providers reveal Lifetime Isa charges

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Providers reveal Lifetime Isa charges

Hargreaves Lansdown, The Share Centre, Nutmeg and AJ Bell have revealed how much it will cost to open a Lifetime Isa, ahead of this week's launch of the new product. 

All four providers confirmed they would use the same charging structures as those used for their traditional stocks and shares Isas.

Investors looking to shop around, however, will have limited options. 

In the first month of the new wrapper's life, only Hargreaves Lansdown, Nutmeg and The Share Centre look set to have a Lisa on the market.

AJ Bell will launch a product at the end of April, while Skipton Building Society will launch a cash-only Lisa in June.

That means three months into the regime there may only be a choice between five providers.

None of the other major life companies, platforms, banks or building societies have committed to a launch date, with the majority yet to confirm whether or not they will offer a Lisa at all.

The Hargreaves Lansdown Lisa is likely to be the first on the market, with a launch in the "early hours" of Thursday 6 April.

A spokesperson for the firm told FTAdviser: "The HL Lifetime Isa will sit alongside our Isa and Junior Isa products with the same investment options (funds, shares, ETFs, corporate bonds, model portfolios, cash park etc), charging structures and minimum investment amounts."

Management charges are 0.45 per cent on investments of up to £250,000, 0.25 per cent on investments between £250,000 and £1m, 0.10 per cent on investments between £1m and £2m, and no charge for investments above that.

There will be no dealing charge for fund transactions, and a charge of up to £11.95 per deal for direct share trades.

Nutmeg will also launch its Lisa on Thursday. The charging structure will be identical to that of its regular Isas, but with a lower investment limit of £100 rather than £500.

That means investments under £100,000 will be charged 0.75 per cent in the "fully managed" option, and 0.45 per cent in the "fixed allocation" option, plus an average investment charge of 0.19 per cent. 

Investments above £100,000 will be charged 0.35 per cent and 0.25 per cent respectively, plus the investment charge.

The Share Centre, meanwhile, stated that its Lisa product - also due to be launched on Thursday - would have no dealing commission, account administration fees or initial charges.

Users would only be charged the "ongoing fund charges within the underlying fund" - typically 2 per cent for the Cautious fund, 2 per cent for the Positive fund and 2.21 per cent for the Adventurous fund.

That puts The Share Centre's Lisa in line with its Ready-made Isa.

A spokesperson for AJ Bell, meanwhile, confirmed its Lisa would "mirror" its Isa rates.

These include management charges of 0.25 per cent for investments under £250,000, 0.1 per cent for investments of between £250,000 and £1m, 0.05 per cent for investment between £1m and £2m, and no charge after that.

Funds will draw a £1.50 dealing charge per trade, while shares will cost up to £9.50 per deal.

Skipton was not ready to reveal the charging structure for its Lisa.

Other providers remained tight-lipped on their plans.

Even more bullish providers like Fidelity International and Zurich are yet to commit to a launch date.

A spokesperson for Fidelity - which, as a firm, has been one of the Lisa's most vocal advocates - said the company's "intention" was to launch a Lisa some time in the 2017/18 tax year, but could give not details.

A spokesperson for Zurich - which had initially committed to launching a Lisa in April - said the firm was "carefully monitoring" the market to "gauge the scale of customer demand and the nature of the emerging market that may follow".

The spokesperson said this "may mean" Zurich launches a Lisa in 2017.

james.fernyhough@ft.com