Lifetime ISA

A LISA is a type of savings account. It could be suitable if you’re aged between 18 and 39 and saving to buy a first home, towards your retirement or both.  

You can save up to £4,000 in your LISA each tax year. It forms part of your overall £20,000 annual ISA allowance. For example, if you save £4,000 into a LISA, you can save or invest up to £16,000 in other types of ISAs. 

When you save, the government pays a 25% bonus on top of your contributions. This bonus is a maximum of £1,000 a year.

If you pay in your full allowance each year between the ages of 18 and 49, you can gain a total bonus of up to £32,000. When you turn 50, you’ll no longer be able to pay into your Lifetime ISA or keep earning the 25% government bonus.

You can withdraw from your LISA after 12 months from your first payment in to buy a house with a purchase price of up to £450,000.

For any other withdrawals before the age of 60, a 25% government withdrawal charge usually applies. This means you’d get back less than you paid in.