Lifetime ISA withdrawal
Along with the generous 25% bonus come rules around taking money out
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2%
Renting costs an average 2% more per month than a mortgage
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40%
The percentage of 18-40 year olds without savings for their first home
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£44k
The average deposit put down by first-time buyers
Rules on withdrawal
There are three scenarios in which you can withdraw from your Lifetime ISA:
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Buying your first home
The home must be in the UK, it cannot cost more than £450,000 and 12 months must have passed since your first payment into the LISA.
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Age 60
You can use you LISA as an extra retirement pot; you can take your savings once you reach age 60.
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Terminal illness
You can withdraw money before age 60 without paying any penalty if you are terminally ill with less than 12 months to live.
Investment Risk Warnings
The value of investments can fall as well as rise and any income from them is not guaranteed and you may get back less than you invested. Past performance is not a guide to future performance.
EQi does not provide investment advice. If you are in any doubt as to the risk or suitability of an investment or product you should seek advice from an independent financial adviser.
The extent and value of any ISA tax advantages or benefits will vary according to the individual's circumstances. The levels and bases of taxation may also change.
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Avoid the 25% penalty
If you withdraw from your Lifetime ISA for any other reason, you'll pay a 25% penalty fee on the amount withdrawn.
So you need to be sure that you can afford to make the investments or you could lose out.
If you die, your Lifetime ISA ends on the date of your death and will form part of your estate for inheritance tax purposes. As the money will no longer be inside a Lifetime ISA wrapper, no government charge will apply on withdrawals.
For more information, read the HMRC rules for Lifetime ISAs.
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Using a LISA to buy a first home
There are specific steps to follow when using a LISA to buy your first home. The process involves you, your conveyancer (solicitor), and your LISA provider.
• The property being purchased must be your first home in the UK
• The purchase price of the property must not exceed £450,000
• You buy the property at least 12 months after you first fund your Lifetime ISA
• You are buying the property with a mortgage
• You must intend to live in the propertyThere may be further requirements specific to the property you would like to purchase, please ensure you review these prior to withdrawing money from the Lifetime ISA.
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