The Lifetime ISA is a longer term, tax-free savings account aimed at helping first time buyers aged 18-39 get on the property ladder or save money towards retirement.
You can contribute up to £4000 a year and the government will give you a 25% bonus on the money you put in - that's a bonus of up to £1000 a year!
But there are some strings attached:
- You can withdraw your money without charge if you are using it to buy your first home under £450k and you’ve had the account for at least 12 months. You can also withdraw without charge once you’re over the age of 60.
- Otherwise, if you withdraw your money, the government will apply a withdrawal charge of 25% of the amount withdrawn, meaning you would have been better off with a normal ISA.
- Also, if you invest in a Lifetime ISA instead of enrolling into your company pension scheme you could lose out on contributions from your employer and your entitlement to means tested benefits could be affected.
You can find out more by reading our frequently asked questions about Lifetime ISAs .