Everything you need to know about Lifetime ISAs
A step by step guide
Get started with a Lifetime ISA
The rules around taking money out
A LISA is a form of Individual Savings Account, only available to UK residents who are aged between 18 and 39 to help people save for their first home or put money aside for their retirement.
The government will add a 25% bonus based on the contributions paid into the account each year. To secure the maximum £1,000 annual bonus, you will need to have paid in £4,000 each tax year.
Like other ISAs, any gains your investments make will be tax-free. A LISA forms part of your ISA overall annual allowance, which is currently £20,000 each tax year.
The government pays the bonus directly into your LISA, based on any payments you have made into your account. It’s calculated as 25% of the cash you have paid in.
You deposit £2,000 into your LISA. HMRC will add a £500 bonus, so you’ll have £2,500. The bonus is based on the amount of money you pay in, not the value of your investments. The bonus is paid into your account as cash and you can then decide where to invest it.
You can’t open a LISA on a child’s behalf, but once they open the account themselves, you can gift money them cash to deposit into their LISA.
You won’t pay tax on any income or capital gains from investments held within a LISA and, if you complete a tax return, you do not need to declare any LISA interest, income or capital gains.
Benefit from our market-leading custody fee of 0.2% per annum on holdings in your account
If you have an EQi ISA, SIPP or dealing account (paying the usual £12.50 quarterly custody fee), your Lifetime ISA will be free
Temporary change to the LISA withdrawal rule
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*Correct October 2020