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Online Cash Lifetime ISA Issue 4

3.25% tax-free pa/AER variable
(Annual Interest)

Ready to apply?

This account might be right for you if:

  • you’re aged 18-39
  • you want to save up to £4,000 each year towards buying your first home with a purchase price of up to £450,000 or helping to fund your retirement.
  • you accept that unless you are using it to buy your first home, accessing your Lifetime ISA savings before you turn 60 will incur a 25% government withdrawal charge.
  • you won't need to access your money within the first 12 months, even if it's to buy your first home unless you're willing to accept the government withdrawal charge.

Summary Box

Account name Online Cash Lifetime ISA Issue 4
What is the interest rate?
Annual Interest

3.25% tax-free pa/AER

  • This account earns interest daily. If you choose annual interest, it’s added to the account the day before the anniversary of account opening.
  • If you ask us to pay interest to a different account, we’ll pay it on the first working day after the day we’d have added it to this account. Working days exclude Saturday, Sunday and bank holidays.
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.
  • Section 8 of our Savings Account Terms and Conditions explains why we may change the interest rate.
  • If you have at least £100 in your account we'll notify you in advance if we intend to reduce your interest rate.
What would the estimated balance be after 12 months based on a £1,000 deposit?

The estimated balance after 12 months would be £1,032, assuming that:

  • the account is opened with £1,000 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.

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.
  • You can deposit from £1 up to your Lifetime ISA allowance (which is £4,000 for both the 2022/23 and 2023/24 tax years) each tax year before your 50th birthday.
  • No joint accounts allowed.
Can I withdraw money?
  • Withdrawals or closures will normally incur a government withdrawal 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 government 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.
Additional information
  • You can’t open a new Lifetime ISA from 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.
  • The Lifetime ISA is a government savings scheme and may change in future.
  • 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.
  • Accounts can be withdrawn from sale at any time and without notice

Important information

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How does the government withdrawal charge affect my savings?

It's important you only save money you don't need immediate access to (it's usually a good idea to have an emergency fund of 3-6 months income for unexpected bills) in order to avoid incurring the government withdrawal charge. This will be charged at 25%. Where the 25% government withdrawal charge applies, as well as returning the 25% government bonus, you'll also lose some of your own savings and will receive back less than you paid in. Find out more about the Lifetime ISA government withdrawal charge. This is demonstrated in the example below.

This example doesn't include any interest earned.

Actions
You open the account with £4,000
The government bonus is added £1,000
Total for 1st year £5,000
You make a chargeable withdrawal £5,000
The government withdrawal charge -£1,250
You receive back £3,750
You lose this much money -£250
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What are the risks of using a Cash Lifetime ISA for retirement savings? 

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

  • when you plan to retire
  • what other savings 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 enough 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 longer term (5 years plus) 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 joining, or paying into, 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.

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What might my Lifetime ISA be worth when I am age 60?

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 £84,051 £315,887 2.50%
25 £100,000 £125,000 £70,995 £224,090 2.50%
30 £80,000 £100,000 £60,147 £167,584 2.50%
35 £60,000 £75,000 £47,834 £117,641 2.50%
40 £40,000 £50,000 £33,860 £73,499 2.50%

Before you apply

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

We’ll set up your Skipton Online access as part of your secure online application, if you haven’t already registered.

Ready to apply?

Pay my interest annually

3.25% tax-free pa/AER variable
(Annual Interest)

Apply online (Annual Interest)

£250 Cashback offer

We’ve got a range of mortgages for first-time buyers and Skipton Lifetime ISA customers who are buying their first home with a Skipton mortgage will be eligible for £250 cashback^ following completion.

  • ^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.

Need help?

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

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.

Speak to us on web chat or alternatively call us on 0345 608 0786

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We always listen to you

If you are not satisfied with our services we have an internal complaints procedure. For more information please call us on 0345 608 0783, 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

You're protected up to £85,000

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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Site intended for UK residents only. Skipton Building Society is a member of the Building Societies Association. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, under registration number 153706, for accepting deposits, advising on and arranging mortgages and providing Restricted financial advice.
Principal Office, The Bailey, Skipton, North Yorkshire, BD23 1DN.

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