It’s been nearly 5 years now since our son opened his LISA with the intention of using it to fund the deposit for the purchase of a house.
We took the decision to use a Stocks and Shares LISA instead of a Cash LISA. Read on to find out if this was the correct decision.
After going through a pandemic and a bear market over the last couple of years you might think that it was a crazy decision to opt for an S&S LISA when saving up for a house deposit.
Why ‘gamble’ on the stock market? Most articles recommend a Cash LISA when saving for a house deposit.
From the start, I was thinking that even for saving up to a period of 5 years it was still better to go down the S&S route, and the bigger risk was losing value in cash terms, especially in, what was then a low-interest rate environment. I thought the worst that may happen would be the loss of the free 25% bonus amount, so we weren’t even risking our own money.
So how has it actually panned out? Here’s a screenshot of the current value.
The account shows a gain of £7019/28%, despite the recent market disruptions caused by a pandemic, high inflation, wars etc.
So it appears that it was the correct decision to go down the S&S route.
We are now looking for a property for FU#1 so he can get on the property ladder during this housing market downturn.
He continues to contribute to his LISA, and we will keep it in the market until he finds something to buy.
Who says it’s impossible for young people to get on the housing ladder? All it takes is discipline to save and a plan in place to do it.
Which LISA would you choose and has this post changed your mind?
Great call on the S&S LISA.
It might be nigh-on impossible for young people to get on the housing ladder down south but up north/northwest, it definitely is down to discipline and saving. Good luck with the house hunting.