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Lifetime ISA Overview
A Lifetime ISA (LISA) is a government-approved savings account designed to help individuals save for their first home or retirement with tax-free benefits.
Key Features:
- Government Bonus: The government adds a 25% bonus to your annual contributions, up to £1,000 per year.
- Purpose: Use the funds for a house deposit (if you’re a first-time buyer) or to supplement retirement savings.
Eligibility and Contributions:
- Available to individuals aged 18 to 39.
- You can contribute up to £4,000 annually, which counts towards your £20,000 ISA allowance.
- The 25% government bonus applies until you turn 50.
Types of Lifetime ISAs:
- Cash LISA: Functions like a traditional savings account, paying interest on your deposits.
- Stocks and Shares LISA: Invests in the stock market, potentially offering higher returns but with associated risks.
Access and Withdrawals:
- Contributions can be made until you turn 50.
- Withdrawals can be made without penalty if used for a first home purchase after the account has been open for a year.
- Funds can be accessed penalty-free from age 60 onwards.
Providers: LISAs are available through banks, building societies, and online investment platforms.
Note: Tax treatment varies based on individual circumstances and may change in the future. This information is for guidance and does not constitute tax advice.
