Using your Lifetime ISA (LISA)

Using your Lifetime ISA to buy your first home

After all the waiting and saving, the moment may have finally come to use your Lifetime ISA to buy your first ever home. But what do you do next? How do you use the money you’ve saved up to buy your first home? 

Things to remember when using your LISA for your first home

• To use your Lifetime ISA to buy your first home, the property needs to be in the UK and cost no more than £450,000, and you must be buying with a mortgage. To avoid the 25% government withdrawal charge, you need to wait at least 12 months from your first payment into your Lifetime ISA before withdrawing money.
• Are you using the Shared Ownership scheme? You can use your Lifetime ISA towards the deposit when you buy your initial share. However, if you make any withdrawals in the future to buy further shares, they will be subject to the 25% government withdrawal charge.
• If you close your Lifetime ISA while there is a government bonus pending it will not be paid to you. If you want to ensure any pending government bonus is paid, you must keep at least £1 in your Lifetime ISA until the government bonus has been credited to your account.

Step 1 - Find out how much you could borrow

Use our Affordability Calculator to check. You just need to provide some information on your income and outgoings. This will give you an idea of how much you could potentially borrow and – with it – a better idea of the sort of home you could afford to buy. 

If you want to consider Skipton for a mortgage, you can also request a Decision in Principle (DIP), if you're ready, or you can do this within 30 days of receiving your calculation.

Step 2 - Arranging a mortgage

You’ve found a home that's right for you and it’s time to make an offer. Many sellers and estate agents may ask you to provide proof of a Decision In Principle (DIP) or Agreement in Principle (AIP), to confirm you can get a mortgage. Our DIP is not legally binding. It shows how much we may be prepared to lend based on your incomings (such as your wage) and outgoings (namely your regular bills).

Our mortgage advisers can talk you through our range of mortgages for first time buyers. They’ll help you find one that's right for you and take you through the application process. 

As an extra bonus, you can receive £250 cashback if you are a Skipton Lifetime ISA customer and you choose to take out a mortgage with us to buy your first home. You get the extra £250 bonus after the home purchase completes. Terms and conditions apply.^

Step 3 - Releasing the money from your Lifetime ISA

Your savings will remain in your account until they’re needed by the conveyancer handling your purchase.

• When it’s time, you’ll need to pass on a completed Investor Declaration Form [PDF] to your conveyancer.
• They will then complete their Conveyancer Declaration Form [PDF] and send it to us.
• We'll email you a confirmation form for you to sign and return to us, which will approve the release of your funds to your conveyancer.
• Once we have all of these documents, we'll release the funds to your conveyancer. This can take up to 30 days.
• Your conveyancer then has 90 days to complete the purchase on your behalf. If the conveyancer finds they need more than 90 days, they can ask for an extension. 
• If the sale doesn’t go ahead, they must return the money to us to put back into your Lifetime ISA.
• If the money is not returned the government withdrawal charge of 25% of the amount withdrawn will apply (unless an extension has been agreed).

Using your Lifetime ISA to help fund your retirement

You can use your Lifetime ISA to help fund your retirement. Access your money without a withdrawal charge from the age of 60.

Getting ready for retirement

Once you reach 50, you'll no longer be able to pay into a Lifetime ISA or receive the government bonus. However, your Lifetime ISA savings 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 a 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).
• 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’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 or workplace pension scheme:

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

Need to know more about Lifetime ISAs?