Saving into a Lifetime ISA
If you are aged 18 to 39, you can open a Lifetime ISA and save up to £4,000 tax-free each year up to and including the day before your 50th birthday. The government will pay a 25% bonus on your contributions, up to a maximum of £1,000 a year.
Your Lifetime ISA allowance forms part of your overall £20,000 annual ISA allowance.
Any withdrawals within the first 12 months of your first payment into a Lifetime ISA will incur a 25% government charge, which would mean you would get back less than you paid in.
Please note between 6 March 2020 and 5 April 2021 the government withdrawal charge is 20%.
After 12 months of making your first payment, you can withdraw money to buy your first home, but if you withdraw for any other reason than that before you reach 60, the government withdrawal charge will apply (unless you're diagnosed with a terminal illness).
Find out more about the LISA withdrawal charges.