Lifetime ISA (Lisa)
To be eligible for a Lifetime ISA (LISA), you must be:
Between the ages of 18 and 39, a UK resident, or a member of the armed forces serving overseas, or their spouse/civil partner.
As long as you have opened an account before you turn 40, you can pay into a Lifetime ISA up to the day before you turn 50.
You can save up to £4,000 into a Lifetime ISA during each tax year, as long as you’re not saving more than the annual overall ISA limit.
The annual overall ISA limit is the maximum total amount you can save into all your ISAs each tax year. The limit for the 2017 to 2018 tax year will be £20,000. Any contribution to a Lifetime ISA counts towards this.
The government will give you a 25% bonus on the total amount you pay into your Lifetime ISA, not including investment interest or investment growth.
That means if you pay in the maximum amount of £4,000 in a year, you’ll receive a tax-free bonus of £1,000 that year.
Money transferred into a Lifetime ISA from another ISA is also eligible for the government bonus.
Once the government bonus has been paid into your Lifetime ISA account, you can invest it just like your other savings and will be able to earn interest or get investment growth on it.
Buying your own home with a LISA:
Saving for your retirement with a LISA:
Between the ages of 18 and 39, a UK resident, or a member of the armed forces serving overseas, or their spouse/civil partner.
As long as you have opened an account before you turn 40, you can pay into a Lifetime ISA up to the day before you turn 50.
You can save up to £4,000 into a Lifetime ISA during each tax year, as long as you’re not saving more than the annual overall ISA limit.
The annual overall ISA limit is the maximum total amount you can save into all your ISAs each tax year. The limit for the 2017 to 2018 tax year will be £20,000. Any contribution to a Lifetime ISA counts towards this.
The government will give you a 25% bonus on the total amount you pay into your Lifetime ISA, not including investment interest or investment growth.
That means if you pay in the maximum amount of £4,000 in a year, you’ll receive a tax-free bonus of £1,000 that year.
Money transferred into a Lifetime ISA from another ISA is also eligible for the government bonus.
Once the government bonus has been paid into your Lifetime ISA account, you can invest it just like your other savings and will be able to earn interest or get investment growth on it.
Buying your own home with a LISA:
- The property must cost £450,000 or less and be in the UK
- The Lifetime ISA must have been opened for at least 12 months to benefit from the government's bonus
- The bonus is per individual so two first time buyers (e.g. couples) can both use their bonus when buying together
Saving for your retirement with a LISA:
- Withdraw the money tax free after age 60 and spend however you choose
- The Lifetime ISA is designed to complement a pension when saving for your future.
- Directing some of your retirement savings towards a LISA could be right for you. However, if you decide to opt out of your workplace pension to pay into a Lifetime ISA, you will not benefit from any employer-matched contributions and it may affect your current and future entitlement to means-tested state benefits