What Is A Lifetime ISA?

August 23, 2024 11:06 AM BST | By Team Kalkine Media
 What Is A Lifetime ISA?
Image source: shutterstock

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. 


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