You can use your Lifetime ISA to help fund your retirement and access your funds without a withdrawal charge from the age of 60.
Getting ready for retirement
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 have the opportunity to earn interest, or investment returns if you have a Stocks & Shares Lifetime ISA. Once you turn 60 you can make as many withdrawals as you like without having to pay the government withdrawal charge.
Things to consider
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.
Any time your circumstances change you should review whether the type of Lifetime ISA you have is still right for you.
Lifetime ISA or pension?
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 5 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 are 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 or 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).