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Cash Lifetime ISA Issue 5

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

Ready to apply?

This account might be right for you if you:

  • are aged 18-39
  • don’t need access to your savings until the age of 60, unless it’s to buy your first home in the UK with a purchase price up to £450,000
  • aren't intending to use your savings towards a first home deposit within the next 12 months
  • want to open and manage your account online.

Summary Box

Account name Cash Lifetime ISA Issue 5
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.
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 starts earning interest straight away
    • no further deposits or withdrawals are made
    • the interest is paid annually
    • the interest is added to this account
    • there is no change to the interest rates stated.
  • Estimated balances are for illustrative purposes only. They may be less for accounts opened by debit card or cheque because interest won’t be earned until your account receives the deposit.
  • The government will also pay a 25% bonus on your contributions which isn’t included in this estimation. Please see section G of the Cash Lifetime ISA Key Features and terms & conditions which explains more about this.
  • If you’re intending to use your Lifetime ISA for retirement, please see section J of the Cash Lifetime ISA Key Features and terms & conditions 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. If you’re 40 or over, the account is only available to you if you’re transferring from another Lifetime ISA.
  • To open and manage this account, a valid email address must be provided.
  • You can only open and manage the account through Skipton Online.
  • The minimum opening and operating balance for this account is £1. You can’t open a new Lifetime ISA from the age of 40, so you must keep at least this amount in the account at all times to keep your Lifetime ISA benefits.
  • Subsequent payments in can be made from £1.
  • You can pay in your total Lifetime ISA allowance each tax year (which is £4,000 for the 2023/2024 tax year) before your 50th birthday.
  • The maximum balance for this account is £1 million.
  • Joint accounts aren’t allowed.
Can I withdraw money?
  • Withdrawals or account closures before the age of 60 will normally incur a government withdrawal charge of 25% of the amount withdrawn unless it’s to buy your first home. Sections A and B of the Cash Lifetime ISA Key Features and terms & conditions explain why you may get back less than you paid in and exceptions to the government withdrawal charge.
Additional information
  • The Lifetime ISA is a government savings scheme and may change in future.
  • The Annual Equivalent Rate (AER) 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

It’s important you only save money in this account you don’t need immediate access to (it’s advisable to have an emergency fund of 3-6 months’ income for unexpected bills) to avoid being charged for withdrawals. Where the government 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. Find out more about the Lifetime ISA government withdrawal charge. The effect of the full 25% government and withdrawal charge is demonstrated in the example below which 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 of your own savings -£250

If you’re thinking of using a Cash Lifetime ISA to save towards retirement, you should consider:

  • when you plan to retire
  • what else you’re doing to save for retirement (for example, paying into a pension); and
  • whether the money you save in a Cash Lifetime ISA will be enough to meet your needs when you retire.

Lifetime ISAs are available as a Cash or a Stocks and Shares option. Skipton offers a Cash Lifetime ISA only. Any time your circumstances change you should review whether the type of Lifetime ISA you have is still right for you.

A Cash Lifetime ISA may not be the best option for retirement savings. You might wish to consider investing in a pension, a Stocks and Shares Lifetime ISA, or both. Saving for retirement is usually a long-term commitment. Investing could give you a better return than a savings account over the long-term (more than five years). But you should be aware that the value of your investment can go down as well as up and you may get back less than you invested.

If you’re employed, you should consider your tax position and whether a workplace pension scheme might be better for you. If you choose to save in a Lifetime ISA instead of a private workplace pension scheme:

  • you may lose the benefit of any employer contributions to that scheme; and
  • it could affect any means-tested benefits you may have been entitled to, now or in the future (as these depend on the amount of income and capital you have, which includes savings).

This information isn’t advice. You should seek financial advice if you’re thinking of changing your existing pension plans to invest in a Lifetime ISA. If you don’t understand the pension and tax rules when you make changes, you may not make the most of your retirement savings. This could mean you don’t have enough money to support you when you’re retired.

  • The following 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. This is based on the current allowance and bonus levels and assumes they do not change. It may not be relevant if you’re 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 may not be representative of the return currently offered by the Skipton Cash Lifetime ISA. If you use our Cash Lifetime ISA to save for your retirement and our rate is less than the 5% used in the illustration, the estimated outcome at age 60 could be significantly less than the figure 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 once the house purchase has completed.
  • 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.
You could lose your home if you don’t keep up your mortgage repayments.

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

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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