Lifetime ISA
Lifetime Savings ISA
for House Purchase or Retirement.

Lifetime ISA

In March 2016 Conservative Budget, the Government announced the Lifetime ISA. With an increase of up to £20,000 cap in all ISA's (up from £15,240).

The Lifetime ISA will help young people save for the long-term.

Lifetime ISA Logo

For every £4 you put into the ISA account, the Government will pay £1.

It allow you save for a first home and for your retirement, without having to choose one over the other.

The Lifetime ISA allows you to Save up to £4,000 each year, and receive a government bonus of 25%.

There is no maximum monthly contribution - you can save as little as you want and up to £4,000 each year.

If you deposit £4,000 the 25% bonus will be up to £1,000 at the end of the tax year.

Over your lifetime you will be able to have contributions of £128,000 matched by the government for a maximum bonus of £32,000.

You can open a Lifetime ISA between the ages of 18 and 40.

You will be able to transfer savings from other ISA's into your Lifetime ISA.

£1 Bonus for every £4

For every £4 you put into the ISA account, the Government will pay £1.

Help to Buy

Your savings and the bonus can be used as a deposit on your FIRST home!

Save for Retirement

You can withdraw the funds without penalty partial or in full after you turn 60.

The ISA will be available after April 2017. Opening a Lifetime ISA will almost identical to opening a regular ISA under the existing rules.

Lifetime ISA's are limited to one account per person. So two first time buyers in the same home can save and both receive a bonus.

Your savings and the bonus can be used as a deposit on your FIRST home (worth up to £450,000).

Your savings and bonus can be used for retirement. You can withdraw the funds without penalty partial or in full after you turn 60.

The Lifetime ISA is designed to work with the grain of existing ISA products and will be simple for savers to use.

For example, a £4,000 contribution made by a 25 year old into a Lifetime ISA which grew at 4% a year would be nearly five times larger due to the government bonus and investment growth by the time they reach 60.

The Lifetime ISA encourages saving for the long term. Therefore, you can make withdrawals at any time - but the government bonus returned and a 5% charge applied.

The Lifetime ISA provides a more flexible way for the self-employed to save for their retirement, with greater freedom to withdraw funds if needed.

This information on the Lifetime Individual Savings Account (ISA) is correct as of 16/03/2016 - it is subject to change.

The Government will consult with the industry and bring forward legislation to enact the Lifetime ISA in Autumn 2016.

Lifetime ISA Illustration

Lifetime ISA Illustration

Lifetime ISA FAQ

Q. How much will the Government Top Up?

A. For every £4 you put into the ISA account, the Government will pay £1.

If you deposit £4,000 the 25% bonus will be up to £1,000 at the end of the tax year.

The maximum "bonus" that will be paid is £1,000 per year.

Q. Can I withdraw it at any time?

A. Yes. You will loose the government bonus for that year and a 5% charge applied.

Q. When does the Lifetime ISA start?

A. You can open an ISA Account in 2017. They will be available after April 2017.

Q. I want to buy a house, Is there a limit on the purchase price?

A. The Government has set a cap of £450,000 maximum purchase price nationwide.

Q. I want to save to retire, When can I withdraw it?

A. You can withdraw the funds without penalty partial or in full after you turn 60.

Q. Will it affect my ISA Limit?

A. Yes. The Government at the time of launch will increase your overall Tax Free ISA Limit to £20,000

Q. Where can I Apply for a Lifetime ISA?

A. At your bank or building society after April 2017.

Q. What banks offer the Lifetime ISA?

A. This will be announced shortly. (Natwest, RBS, First Direct, TSB, Santander, Halifax and Nationwide offered the old Help to Buy ISA.)

Q. I already have a Help to Buy ISA?

A. You can transfer your Help to Buy ISA into your Lifetime ISA.

Q. Can I have a joint Lifetime ISA?

A. You wont want too. Each individual can open a Help to Buy ISA, therefore increasing what you can put in a year from £4,000 to £8,000. These will be two separate Lifetime ISA Accounts.

Q. Who will be able to get a Lifetime ISA?

A. Anyone over 18 and under 40 years old at the time you open the account.

As the goal is both to help you save for a first home and for retirement, anyone who meets the age criteria can open one, even if you already own a home.

Q. When do I get the Lifetime ISA bonus?

A. The bonus is paid at the end of each tax year.

If you're currently 17, and you open a Lifetime ISA on your 18th birthday, you'll be able to get a maximum £32,000 government bonus by the time you're 50.

Q. Can I invest elsewhere also?

A. Yes, the ISA is designed so that you can either save as cash and get interest, or invest (in stocks and shares). You will still get the Bonus.

Q. Help to Buy ISA or Lifetime ISA?

A. Both give a bonus of £1 for every £4 saved but only up to £3,000 in total on the Help to Buy ISA, compared to £1,000 per year with the Lifetime ISA.

The Lifetime ISA also has a larger "limit" on house price of £450,000 compared to £250,000 in a Help to Buy ISA.

Q. Will my savings in a Lifetime ISA affect my eligibility for benefits?

A. Yes. Just with savings and other ISA's it will effect your eligibility for benefits.

Q. Is their a minimum monthly contribution?

A. No. You can save as little as you want and up to £4,000 per year.

Best Lifetime ISA

Find the Best Lifetime ISA here in April 2017.

Lifetime ISA Research

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