Lifetime ISA

Learn more about Lifetime ISAs

• When can I take money out of my Lifetime ISA?

  You can withdraw your money tax free when you’re ready to use it for an eligible house purchase (worth up to £450,000), after you turn 60, or if you are terminally ill. The Lifetime ISA must be opened for 12 months from the date of the first payment.

  You can take money out at other times too (including in the first 12 months), but there will usually be a 25% charge from the government (20% if the withdrawal is made between 6 March 2020 and 5 April 2021). This could mean you get back less than you put in.

• What is an eligible house purchase for a Lifetime ISA?

  You’ll need to have had your Lifetime ISA for a full year, and you’ll need to be a first-time buyer.

  The house you’re buying has to be in the UK and cost £450,000 or less. This is just the house price and it doesn’t include fixtures and fittings. It also needs to be your main residence. If it’s still being built, it’ll need to be your main residence as soon as it’s ready for you to live in.

  You’ll need to be buying the house with a mortgage, regulated home purchase plan or through a shared ownership arrangement. If you’re buying a house with cash, you can still use your Lifetime ISA money. But you’d have to pay the government withdrawal charge, which means you could get back less than you put in.

• When is my Lifetime ISA open?

  Your Lifetime ISA is opened from the date you pay money into it – either with a lump sum, direct debit or from a transfer. Direct debit is on the 7th, or the next working day, each month.

• Who qualifies as a first-time buyer?

  You’re a first-time buyer if you don’t own, and have never owned, a residential property anywhere in the world, either by yourself or together with someone else. This includes any property that you inherited or that was given to you.

• How and when do I get the government bonus?

  We claim the government bonus for you and add it to your Lifetime ISA. We’ll do this as soon as possible each month and you should see it in your account in four to nine weeks from the date of your contribution. Please note, the bonus will be added to your Lifetime ISA as cash and you can just place your investment instruction when you’re ready. This can be easily done online, over the phone or in writing.

• Can I open a Lifetime ISA if I already have other ISAs?

  Yes, you can open and add money to other types of ISAs (Cash ISAs, Stocks and Shares ISAs or Innovative Finance ISAs) alongside your Lifetime ISA. You’ll only be able to save into one Lifetime ISA each tax year.

  You can contribute up to £20,000 across all your ISAs in the 2020/21 tax year, with up to £4,000 in your Lifetime ISA. The government bonus doesn’t count towards the £20,000 overall limit or the £4,000 Lifetime ISA limit.

• Can I open a Lifetime ISA in joint names?

  You can only open a Lifetime ISA in your name. This is the same with all ISAs. But each adult under 40 can open a Lifetime ISA. So first-time buyers buying together could both use their Lifetime ISA and bonus towards their home.

• How can I use a LISA to save for later life?

  If you don’t need a LISA to save towards your first home, you can use it towards your retirement (after age 60). You’ll get the same top up from the government (25%) on top of any contributions you make until your 50th birthday.

  A LISA should be seen as a complement to a pension when saving towards later life. But you should note that a pension is often the better option, especially if you receive contributions from an employer or you’re a higher rate taxpayer.

  If you decide to opt out of your workplace pension to pay into a LISA, you won’t benefit from any employer-matched contributions and it may affect your current or future entitlement to means-tested state benefits.