Lifetime ISA

The Lifetime ISA is a type of Individual Savings Account (ISA), designed to help you buy your first home or save towards your retirement.

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.

Unless you’re using it to buy your first home, accessing your Lifetime ISA savings before you turn 60 will incur a 25% government withdrawal charge (unless you are diagnosed with a terminal illness).

With a bit of a boost, I could buy my own place.

Ready to apply?

View full product details of our Lifetime ISA and apply online now

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Important things to think about

Some ISAs are flexible, which means you can withdraw and pay back in throughout the tax year without affecting your overall annual ISA allowance. However, Lifetime ISAs are not flexible, so it will not be possible for withdrawals to be made and replaced without affecting your annual Lifetime ISA allowance or your overall ISA allowance.

If you close your Lifetime ISA after you reach age 40 you won’t be able to open a new one. If you intend to use your Lifetime ISA savings towards buying your first home or to save towards retirement, you may wish to leave a small amount in the account so you can continue to save in it in future.

You can continue to pay into your Lifetime ISA up to the day before your 50th birthday and will gain a bonus of up to £10,000 if you pay in your full allowance each year between the ages of 40 and 50.

Using your Lifetime ISA - first time buyers

From 12 months after you have opened your Lifetime ISA you can use some or all of the money built up in it to help buy your first home, up to the value of £450,000. If you're buying with someone else, you can both potentially use a Lifetime ISA if you’re both first time buyers.

To do this, you must instruct your conveyancer to use your Lifetime ISA to buy your first home from 12 months after opening it. If you’ve transferred a Lifetime ISA to us, this period starts from the date you originally opened your Lifetime ISA.

Using your Lifetime ISA - to help fund your retirement

You can access money in your Lifetime ISA from age 60 to help fund your retirement

Ready to apply?

View full product details of our Lifetime ISA and apply online now

Apply now

You can also use your Lifetime ISA to help fund your retirement and access your funds without a withdrawal charge from the age of 60.  Any money you keep in the Lifetime ISA after you turn 60 will continue to earn interest tax-free and you can make as many withdrawals as you like without being charged.

Once you reach your 50th birthday, you'll no longer be able to pay into a Lifetime ISA or receive the government bonus. However, your Lifetime ISA savings will still earn interest, or investment returns if you have a Stocks & Shares Lifetime ISA. 

If you are employed, you should consider the potential availability of a workplace pension scheme 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

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