Short clip of Ndubuisi 'Andy' Egwim explaining tax advantages of contributing to a SIPP versus a Lifetime ISA. He compares immediate tax relief (40% for higher-rate taxpayers) from a SIPP with the 25% government bonus on Lifetime ISA contributions, and advocates keeping Lifetime ISA funds invested in stocks and shares rather than cash because of compounding and access rules (cannot add after age 50; withdrawals with government bonus accessible at 60).
Chapters
Imagine that I put in like 20k into my sip and let's say I'm a higher rate taxpayer and I immediately get 40% tax relief, meaning the government has 20% of the money I've put in and I claim 20% through self assessment. I'm already 40% ahead before I've taken any risk. Imagine you put money your lifetime ISR stock and shares and you get 25% already credited as £1,000. You put in 4,000, you get £1,000. You're already ahead before you started investing. Okay, but a note to understand, after 50 years, you can't put in more money in your lifetime isa. Now this is for those of you who have hung around to this point. After 50 years you can put in more money to your lifetime ISA, but you then have to wait till 60 years. That's why it makes no sense to me from mathematical point of view to have my lifetime SI in cash. I rather have it in stock and shares. Because if at 50 I don't put any more money in the lifetime I saw, but it's in stock and shares, guess what it's doing is in the market, it's compounding, it's working. But if it's in cash, then it has to sit around, wait for inflation to deal with it, wait another 10 years. 10 years that I'm not getting any government relief because I'm not putting any money until 60 years. Does that help to drive the point home for you? Yes, it does, absolutely. Thank you so much. Excellent.
