A lifetime individual savings account is a type of savings account that can be used to help save for your first home, retirement or both with a bonus of up to £1000 per year from the government until you reach the age of 50. Here’s a summary of the key benefits and criteria of a LISA:
• Must be aged between 18 and 40
• Can put a maximum of £4,000 per year into it
• If you save up to £4000, the government will match the amount with a proportional 25% bonus.
• The bonus is paid each year up until you turn 50
• A LISA can be made up of cash, stocks, or a combination, depending on what you need it for.
• The earliest you can withdraw your LISA fund is one year after opening it.
• You can’t use the money in your LISA unless it’s to buy your first home, you’re aged 60 or over, or (sadly) if you’re terminally ill with less than 12 months to live.
• The maximum house value you can put the LISA towards is £450,000 (on a property anywhere in the UK).
• You can combine your LISA with a partner to buy a house (who can also use their own LISA).
• You can’t use the LISA to buy a property to let – you must intend to live there.
• You are allowed to have a Help to Buy ISA open at the same time as a LISA, but you cannot use both to buy a property with (note: you can no longer open Help to Buy ISA accounts).
• You can transfer any Help to Buy funds into your LISA.
If you’re unsure of whether a LISA is the right thing for you or would like any further information, please get in contact with us to have a chat with our expert financial advisers in more detail.