Lifetime ISA Frequently Asked Questions


Your Lifetime ISA

From paying in and receiving your bonus to withdrawing funds if you need to, here are the basics about the Lifetime ISA.

The 25% government withdrawal charge is applied to the amount you withdraw. As well as returning the 25% government bonus, you'll also lose some of your own savings and will receive back less than you invested. This is demonstrated in the example below.

This example doesn't include any interest earned.
Your 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 is 25% -£1,250
You receive back £3,750
You lose this much money -£250

HMRC will calculate bonus payments for your Lifetime ISA on a month-by-month basis. Your bonus is calculated on any payments you make into your account from the 6th of the month to the 5th of the following month. Your bonus will be paid into your account within 14 days of the 20th of month two.

The day we receive payment from HMRC, we pay it directly into your account, so you don’t lose any interest.

Important – In order to receive the 25% government bonus you must ensure your details held at both Skipton and HMRC are correct. This includes both your first name and surname, date of birth and National Insurance number (you must not hold a temporary National Insurance number to qualify for a Lifetime ISA).

You can cancel your Lifetime ISA within 30 days of opening it without incurring a government withdrawal charge. You will get back the full amount you have paid in and you can still open another Lifetime ISA within the same tax year (if eligible).

To cancel your Skipton Online Cash Lifetime ISA within the first 30 days of opening the account, log into Skipton Online and send us a secure message confirming you’d like to close your Lifetime ISA and include the bank details of where you’d like the withdrawn funds to be sent. We will then call you within 48 hours to confirm this. Due to our online security measures, we can’t return your money until 14 days after opening your account.

If the cancellation period has passed, please refer to "How do I withdraw funds from my Lifetime ISA?"

Yes, but you can only pay into one Lifetime ISA in each tax year and the maximum amount you can pay in each year is your annual Lifetime ISA allowance (£4,000 in 2019/2020 tax year). For each Lifetime ISA you open, you will need to wait 12 months before being able to instruct your conveyancer when buying your first home. If you don't wait 12 months the 25% government withdrawal charge will apply.

You can only have one Lifetime ISA in each tax year, and you can pay in up to your Lifetime ISA allowance (£4,000 in the 2019/2020 tax year) each tax year up to and including the day before your 50th birthday. During the same tax year you can also have one Cash ISA, one Stocks & Shares ISA and an Innovative Finance (peer-to-peer) ISA. The combined total of your ISA savings must not exceed the annual ISA allowance (£20,000 in 2019/2020.) 

For example, if you save the maximum of £4,000 into a Lifetime ISA, you would still have £16,000 left of your ISA allowance.

If you make a payment that means you exceed your annual Lifetime ISA allowance (£4,000 for the 2019/2020 tax year), we'll return the whole payment. If you have any of your Lifetime ISA allowance remaining, you can make another payment as long as it doesn't take you over your annual allowance.

  Lifetime ISA Help to Buy ISA
How much can you save per year? £4,000 £2,400 (£3,400 in year one)
Payment restrictions? None £200 per month
Maximum bonus? £32,000 (over 32 years) assuming a maximum contribution £3,000
Bonus paid? Monthly When you buy a home
Maximum property price? £450,000 £250,000 (£450,000 in London)
Minimum period to hold account for a house purchase? None, but you will pay a 25% withdrawal charge if you withdraw for first home purchase within 12 months of your first payment into the account. At least £1,600 saved
Who can open it? Anyone aged 18 to 39 First-time buyer aged 16+
When is money paid out for a house purchase? Funds available for exchange of contracts Funds available upon completion
Withdrawal charge? 25% if you withdraw before 60 for any reason other than buying your first home If withdrawing for any reason other than buying your first home, no withdrawal charge but no bonus is paid.

Yes you can pay into both, however you can only use the bonus from either a Lifetime ISA or a Help to Buy ISA – and not from both – to buy your first home. You can use your Lifetime ISA to buy your first home 12 months after opening it.

No, you can only receive the government bonus on either a Help to Buy ISA or a Lifetime ISA. You cannot claim the bonus for both accounts. You can transfer your Help to Buy ISA in to a Lifetime ISA (these funds will count towards your Lifetime ISA allowance) and these will be eligible for the 25% government bonus.

Remember, if you transfer funds from other types of ISA into your Lifetime ISA, the start date of your account is the day you opened your Lifetime ISA, not the date you opened your previous ISA.

If you're withdrawing Lifetime ISA funds to buy your first home, you can only access the money without incurring the 25% government withdrawal charge if your first payment into your Lifetime ISA was at least 12 months before.

A 25% government withdrawal charge applies (except for terminal illness or death) if you:

  • make a withdrawal, for any reason (even first home purchase), within 12 months of the first payment into your Lifetime ISA
  • withdraw before your 60th birthday, unless it's to buy your first home.

Where the government withdrawal charge applies, you'll get back less than you paid in.

If you are outside of the 30-day cancellation period and wish to make a chargeable withdrawal you will need to log in to Skipton Online and follow the steps below:

  1. Send us a Secure Message detailing:
    • the account number and sort code for the account you'd like to transfer the funds to (the account must be in your own name)
    • the amount you want to withdraw or confirmation you want to close the account.
  2. Within five working days we will email confirmation of your request and details of any government withdrawal charge payable.
  3. You need to confirm to us your acceptance of any government withdrawal charge or cancel your withdrawal request.
  4. We'll send the funds to the account you've specified.

If you transfer out of your Lifetime ISA into a different type of ISA (Cash ISA, Stocks & Shares ISA or an Innovative Finance ISA) the transfer will be subject to the 25% government withdrawal charge. This means you’ll get back less than you paid in.

You can transfer your Lifetime ISA into another Lifetime ISA without incurring the government withdrawal charge.


Buying a house with your Lifetime ISA

We’ve pulled together what you need to know about using your Lifetime ISA to buy your first home.

If you withdraw money from your Lifetime ISA less than 12 months after your first payment into the account, you will have to pay the 25% government withdrawal charge on the amount withdrawn. This would mean you get back less than you paid in. If you're using your Lifetime ISA for your first home, the money can only be used for your deposit and it must be purchased with a mortgage, on a house in the UK for you to live in, valued at £450,000 or less.

You can use your Lifetime ISA to buy your first home 12 months after your first payment into the account without paying the government withdrawal charge. If you’ve transferred to us from a Lifetime ISA with another provider the 12 months starts from the date you paid into the original Lifetime ISA.

If you withdraw before then, even if it is to buy your first home, the 25% government withdrawal charge will apply.

You can give our Conveyancer Declaration (PDF) to your coveyancer along with your completed Investor Declaration form. Alternatively, they can find both of these forms on our solicitors' page as well as more information about our Lifetime ISA first time buyer withdrawal process.

Your conveyancer should send us these at least 30 days before your completion date.

We require the completion date so we can process the request and prioritise the withdrawal for a first house purchase request. If we do not have this, we will release the funds to your conveyancer 30 days after we receive the request. If your form has been sent without a completion date, and your completion date is now set for less than 30 days after we received your form, you or your conveyancer should contact us as soon as possible.

Your conveyancer should send your declaration forms to request your first house purchase withdrawal at least 30 days before your completion date.

We ask for the completion date so that we are able to process and prioritise the withdrawal for a first house purchase request and we will aim to release the money within 48 hours before your completion date. If we do not have this, we will release the funds to your conveyancer 30 days after we receive the request.

If your form has been sent without a completion date, and your completion date is now set for less than 30 days after we received your form, you or your conveyancer should contact us as soon as possible.

If both you and the person you are buying your home with are first time buyers, you can both use your Lifetime ISA to put towards the purchase of your home, without paying the government withdrawal charge.

If you are a first time buyer, but the person you are buying your home with has owned a property before then they would not be able to use their Lifetime ISA (if they’ve opened a Lifetime ISA too) to purchase a home without incurring a government withdrawal charge. However you, as a first time buyer, would still be able to use your own Lifetime ISA towards the price of the home that you are buying together.

In both cases the price of the home you’re buying together must not exceed £450,000 if you wish to use your Lifetime ISA towards it without paying a government withdrawal charge.

The purchase price of your new home must not exceed £450,000 and the property must be purchased in the UK with a mortgage, but not a Buy to Let mortgage. You must occupy the property as your main residence immediately on completion.

Please note – if you or your spouse/partner are a UK Crown employee serving overseas you must intend to reside in the UK and use the property as your main residence in the future.

90 days from your conveyancer receiving the funds from us. If it’s taking longer than 90 days the conveyancer can write to us to request an extension.

The conveyancer must return the funds within 10 working days of the house purchase falling through, and the amount withdrawn will be paid back in to your account. If the first house purchase withdrawal had closed the account, it will be reopened when the funds are returned, but your membership will not be backdated (if this was the only Skipton account you held). If the conveyancer returns less than the amount withdrawn for the first house purchase, or doesn’t return the funds, you will be charged a 25% government withdrawal charge on the shortfall amount.

  • 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.

Security is required for any loan.

If your account is closed, your account would be reinstated and the bonus paid in. We’d record a break in membership with the Society on the system if you don’t have any other accounts with us. We’d then contact you to confirm we’ve received the bonus and ask you what you’d like to do with the bonus amount received. If the bonus has been received after the house purchase has completed you would have to pay the 25% government withdrawal charge if you choose to withdraw it before the age of 60.

If you’re using the Shared Ownership scheme to buy your first home, your Lifetime ISA can be used towards the deposit when you buy your initial share, but it can’t be used again without paying the 25% government withdrawal charge to buy any further shares in future.

The conveyancer is able to request withdrawals from the account on your behalf as many times as you wish up to completion, there is no minimum withdrawal amount. We’d require completed declarations from both you and your conveyancer each time a withdrawal is requested during this process.

You will be unable to use your Lifetime ISA without paying the government withdrawal charge if you already own a property. If you are unsure whether you already legally own the property or need any clarification, you should seek some independent advice.

Learn more about Lifetime ISA

Find out more about Lifetime ISA

We cover the important facts, the things to think about, and bonus information.

Find out more

Using Lifetime ISA for First Time Buyers

We’ve pulled together what you need to know about using your Lifetime ISA to buy your first home.

Find out more

Using Lifetime ISA to help fund retirement

We’ve pulled together what you need to know about using your Lifetime ISA to fund your retirement.

Find out more

Next Steps

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