Online Cash Lifetime ISA

£250 Cashback on a Skipton Mortgage when you take out an Online Cash Lifetime ISA

This account might be right for you if:

  • You’ve never owned a home and want to save to buy a house in the UK worth up to £450,000.
  • You’re aged 18-39.
  • You initially want to save to buy your first home but want the flexibility to use the savings to support your retirement if your circumstances change.

This account might not be right for you if:

  • You want to save for a house and buy within the next 12 months.
  • You’re 40 or over and don’t already hold a Lifetime ISA.
  • You don’t have any spare cash set aside for unexpected bills (an emergency fund).

Summary Box

Account name Online Cash Lifetime ISA
What is the interest rate?
Annual Interest 0.50% tax-free pa/AER
Interest is earned daily and added to your account at midnight on the anniversary of the date your account was opened.
Monthly Interest: No monthly interest option available.
Can Skipton Building Society change the interest rate?
  • Yes, the interest rate is variable, so it can go up or down.
  • You'll find full details of this and the reasons why we might change the interest rate in section B23 'interest' of our Investment Account Terms and Conditions.
  • If the interest rate ever goes down, we'll always write to you in advance to let you know as long as you have at least £100 in your account.
What would the estimated balance be after 12 months based on a £1,000 deposit?
  • The estimated balance after 12 months would be £1,005, based on the following assumptions:
    • £1,000 is paid in when the account is opened and interest starts being earned straight away
    • No further deposits or any withdrawals are made
    • The interest is paid annually and added to the account
    • The interest rate stays the same for the full 12 months
  • Estimated balances are for illustrative purposes only and may be less for accounts opened by debit card or cheque.
  • The government will also pay a 25% bonus on your contributions each year which isn’t included in this estimation. Section G in the Online Cash Lifetime ISA Key Features document explains more about this.
  • If you’re intending to use your Lifetime ISA for retirement please see Section J in the Online Cash Lifetime ISA Key Features document which includes further information about what your Lifetime ISA might be worth at age 60.
How do I open and manage my account?
  • This account is available to UK residents aged 18 to 39, or above if transferring from another Lifetime ISA, and can only be opened and managed online.
  • The first payment into the account can be by debit card, internal transfer from another Skipton account, or electronic payment (but not direct debit) from another UK bank or building society. You can also transfer ISA savings in from other providers via our ISA transfer service. After that, you can also pay in by cash (in branch only, and we’ll need to see some photographic ID for the first cash payment), cheque (in branch or by post) or by standing order.
  • You can deposit from £1 up to £4,000 each tax year before your 50th birthday.
  • No joint accounts allowed.
Can I withdraw money?
  • In the 2017/2018 tax year, you can close your account without any charges. You will not receive the 25% government bonus and any money you save won’t count towards that tax year’s Lifetime ISA allowance.
  • From tax year 2018/2019, withdrawals or account closures will normally have a government charge of 25% of the amount withdrawn. Sections A and B in the Online Cash Lifetime ISA Key Features document which explain why you may get back less than you paid in and exceptions to the withdrawal charge.
  • For security reasons, you can’t withdraw in the first 14 days of us receiving your first payment. This applies to both new and existing customers.
  • You can cancel the account in the first 30 days, if you need to. The section ‘What if I change my mind?’ on page 5 in the Online Cash Lifetime ISA Key Features document explains more about this.
  • You can’t open a new Lifetime ISA after the age of 40, so you’ll need to keep at least £1 in your account after this age if you want to keep your Lifetime ISA benefits.
Additional Information
  • AER stands for Annual Equivalent Rate and shows what the interest rate would be if interest was paid and added each year. All ISA interest is paid tax-free, which means it’s exempt from income tax. Tax rules may change in future. The AER allows you to compare the interest rates on savings accounts. The higher the AER, the better the return on your savings.
  • It’s worth noting that any of our accounts can be withdrawn from sale at any time and without notice.
  • The Lifetime ISA is a government savings scheme and may change in future.

It's important you only save money you don't need immediate access to (it's advisable to have an emergency fund of 3-6 months income for unexpected bills) in order to avoid being charged for withdrawals. Where the withdrawal charge applies, as well as recovering the 25% government bonus, you'll also lose some of your own savings and will receive back less than you invested. This is demonstrated in the example below.

This example doesn't include any interest earned.

Your actions 1st year 2nd year
You open the account with £4,000
The government bonus is added £1,000
Total for 1st year £5,000
You withdraw early £5,000
The government charge is 25% -£1,250
You receive back £3,750
You lose this much money -£250

If you decide to use your Skipton Cash Lifetime ISA to save towards retirement, you should consider:

  • when you intend to retire
  • what other provision for retirement you are making (for example contributions to a pension); and
  • whether a Cash Lifetime ISA will meet your savings goals. For example, will it provide you with sufficient income in retirement?

As your circumstances can change over time you should regularly review whether the type of Lifetime ISA you hold is still right for you.

A Cash Lifetime ISA may not be the best option for retirement savings. It’s generally accepted that saving for retirement is a long term commitment and it could be better to invest in stocks and shares. However, this will depend on your personal circumstances, including your attitude to risk. You could invest in a pension or stocks and shares Lifetime ISA. Whilst the value of your investment is at risk and can fall as well as rise, it may be possible to receive a better return from a stocks and shares based product over the long term (more than 10 years) than you would from a savings account.

If you are employed, you should consider the potential availability of a workplace pension scheme through an employer which provides employer matched contributions, and your tax position. If you save in a Lifetime ISA instead of enrolling in, or contributing to, a pension scheme from your employer or personal pension scheme:

  • you may lose the benefit of contributions by an employer (if any) to that scheme; and
  • your current or future entitlement to means tested benefits may be affected (these depend on the amount of income and capital you have, which includes savings).

Please be aware that the information we have provided is not advice. If you’re considering varying your existing pension arrangements as part of a decision to invest in a Lifetime ISA, you should seek independent financial advice before making any changes. If you don’t fully understand the pension and tax rules when making changes, you may not optimise your retirement savings and may face an income shortfall in retirement.

This table is designed to help you understand what the value of a Lifetime ISA might be at age 60, depending on the age at which saving starts and assuming the maximum annual subscription at the beginning of each tax year up to age 50 and receipt of the Lifetime ISA government bonus. It may not be relevant if you are saving in a Lifetime ISA for house purchase.

The estimated figures in columns 4 and 5 are based on standardised rates of return, which may not reflect actual or expected returns for your choice of investment for a Lifetime ISA, and include the effect of inflation. They are not based on the rate of interest offered.

Column 6 shows how inflation (assumed at 2.5%) and charges could affect the returns from a Lifetime ISA. As the Skipton Cash Lifetime ISA has no management charges, these have not been included; it’s worth bearing in mind that charges will normally apply for stocks and shares Lifetime ISAs.

You can use the figures in column 6 to compare the returns from a Lifetime ISA without management charges offering a 5% return to other Lifetime ISAs or long term savings products. This is not representative of the return currently offered by the Skipton Cash Lifetime ISA which is less than the 5% used in the illustration. If you use our Cash Lifetime ISA to save for your retirement the estimated outcome at age 60 could be significantly less than the figures provided in column 5.

1. Age saving in a lifetime ISA started 2. Total amount paid in by lifetime ISA saver/investor 3. Total amount paid in, plus lifetime ISA government bonus 4. Estimated outcome at age 60 from 0% return 5. Estimated outcome at age 60 from 5% return 6. Charges and estimated inflation would reduce a 5% return to
18 £128,000 £160,000 £84,060 £315,818 2.50%
25 £100,000 £125,000 £71,005 £224,032 2.50%
30 £80,000 £100,000 £60,158 £167,532 2.50%
35 £60,000 £75,000 £47,847 £117,596 2.50%
40 £40,000 £50,000 £33,875 £73,459 2.50%

Owning your own home is an exciting prospect. You can use your Lifetime ISA to help buy your home as long as the following criteria are met:

  • You have held your Lifetime ISA for at least 12 months.
  • If you are buying with someone else, you can both use a Lifetime ISA as long as neither of you has owned a property previously.
  • The value must not exceed £450,000.
  • The property must be purchased in the UK with a mortgage, but not a buy to let mortgage unless you, or your spouse or civil partner, are a UK Crown employee serving overseas and intend to use the property as your main residence in the future.
  • You must occupy the property as your main residence immediately on completion, or if you or your spouse/civil partner are a UK Crown employee serving overseas, you must intend to in the future.

Yes, and there’s no minimum withdrawal amount. For example, you may have more than one Lifetime ISA and you may need to phase your withdrawals during your house purchase.

When you come to buy, you’ll need to tell your conveyancer you want to use part or all of your Lifetime ISA towards the purchase and provide them with a declaration. 

Your conveyancer also has to provide us with a declaration. It’s your responsibility to ensure this is provided, but your conveyancer should do this as part of the buying process.

Once we receive the appropriate paperwork from your conveyancer we’ll pay the amount requested to the conveyancer within 30 days without applying the government withdrawal charge.

Yes. We reserve the right to withdraw this facility at any time. If this happens we’ll contact any customers we have received the transfer document from to explain the options available. 

You can only transfer once from a Help to Buy ISA without affecting your Lifetime ISA allowance. If you transfer your Help to Buy ISA to a Lifetime ISA in the 2017/18 tax year, you can transfer the balance as at 5 April 2017, plus any interest earned, and the amount transferred won’t count towards your 2017/18 Lifetime ISA subscription limit of £4,000. 

Any payments into, or interest added to your Help to Buy ISA after 5 April 2017 which you then transfer to a Lifetime ISA will be treated as part of your annual Lifetime ISA allowance.
Whilst the first transfer from your Help to Buy ISA won’t count towards your annual Lifetime ISA allowance, subsequent transfers will. If you want to retain your full Lifetime ISA allowance, you’ll need to transfer all of your Help to Buy ISA savings in a single transaction.

You’ll receive the government bonus of 25% on the full value of the eligible amount transferred as well as any money you pay into your Lifetime ISA in 2017/18. For example, if you transferred £3,000 from a Help to Buy ISA (which was the balance at or before 5 April 2017), you could also pay in your annual Lifetime ISA allowance of £4,000 and the bonus would be paid on the £7,000 invested in 2017/18. 

  • Subject to our normal affordability assessment and lending criteria at the time, Skipton Lifetime ISA customers who are buying their first home with a Skipton mortgage will be eligible for £250 cashback following completion of their mortgage.
  • This offer is only valid for mortgages completing from 6 April 2018 to 30 June 2027.
  • Cashback will be paid for new mortgages where at least one of the applicants is a Skipton Lifetime ISA customer buying their first home.
  • If the mortgage is in joint names and with another Skipton Lifetime ISA holder, only one cashback amount will be paid.
  • Cashback will only be available once.
  • YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

If you are not satisfied with our services we have an internal complaints procedure. For more information please call us on 0345 850 1722, ask in branch or visit our Complaints page.

The Financial Ombudsman Service provides a free and independent service for consumers, and can be contacted at The Financial Ombudsman Service, Exchange Tower, London E14 9SR. Telephone: 0800 023 4567.

www.financial-ombudsman.org.uk

For products and services bought online you can also refer to the Online Dispute Resolution platform (ODR) at http://ec.europa.eu/consumers/odr/. As we're a UK building society, the ODR will still refer you to the Financial Ombudsman Service as the alternative dispute resolution body. The Financial Ombudsman Service will refer you back to our complaints process unless you've already been through this.

Need help?

Take a look at our Lifetime ISA information page for more detail and FAQs.

If you have a question or need help deciding then you can phone, email or call into a branch - we're always happy to help.

Call us on 0345 607 9755
Our lines are open Monday to Thursday 8am-8pm, Friday 8am-5.30pm and Saturday 9am-12pm.

Apply

Things to know before you apply

  • This account can only be opened and managed online
  • You will need your National Insurance number when applying for this account.

We like to make sure you are fully aware of the charges which we will make for a number of services and facilities relating to our investment accounts. You can see these in our Tariff of Charges [PDF].

It is important that you read the key features and terms and conditions carefully. These contain the details of your agreement with us for these accounts and we will rely on them for our relationship with you.

You can apply for this account securely online. If you are not an existing Skipton Online customer, we will set up your online access as part of this process.

Annual interest option

  • 0.50% tax-free pa/AER variable

Financial Services Compensation Scheme

Your eligible deposits with Skipton Building Society are protected up to a total of £85,000 by the Financial Services Compensation Scheme (FSCS), the UK's deposit guarantee scheme.

Learn more about the FSCS

FSCS - Protecting Your Money
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