Lifetime ISA (LISA)
- Deposit required: A minimum payment of £1 required to qualify the account as 'open'
- Headline benefits: The government will contribute 25% on up to £4000 saved in a LISA account every year – that is a Government top up of up to £1000 each year.
- Headline requirements: First time buyer aged 18-39 purchasing a first home up to the value of £450k.
Overview of scheme
The Lifetime ISA (LISA) is a long-term savings product intended to support younger people saving for their first home, or for later life. Up to £4,000 can be saved each year, attracting a government bonus of 25% on each new payment. Funds can be withdrawn without charge 12 months after opening the LISA , if used as a deposit for the account holder’s first home, subject to certain conditions.
Frequently asked questions
Adults aged 18-39, saving for a first home or later life.
To open a Lifetime ISA you must be aged 18-39 and a resident in the UK, unless you’re a crown servant (for example, in the diplomatic service), their spouse or civil partner. You can save up to £4,000 in your Lifetime ISA each year. This counts towards your annual ISA limit, which is £20,000 for the 2021 to 2022 tax year. To use the funds towards a first home, the property value must be under £450,000.
During the 2019-20 tax year, 545,000 individuals subscribed savings to a LISA.
- You must be a first-time buyer aged 18-39.
- Your property value cannot exceed £450,000
- You must buy with a mortgage
- You must live in the property as your main residence
- You must buy the property at least 12 months after you open the Lifetime ISA and make your first savings
- You use a conveyancer or solicitor to act for you in the purchase – the ISA provider will pay the funds directly to them
Funds can be withdrawn from a Lifetime ISA without charge to purchase a first home, in the case of terminal illness or from the age of 60. All other withdrawals are subject to a 25% government charge. If you have a Lifetime ISA and a Help to Buy ISA, you can only use the government bonus from one of them to buy your first home.
If you are buying with someone else that has a Lifetime ISA, they can use their savings and government bonus too. Anyone who already owns or has a legal interest in property will pay a 25% withdrawal charge to use their Lifetime ISA savings.
How to apply
Find a provider offering the LISA product (Banks, Building Societies, other financial providers)
Contact the provider directly to open the account
A minimum payment of £1 required to qualify the account as ‘open’
Process for applying/accessing the scheme
Between the age of 18 and 39; at least 12 months before intending to purchase a property
Individuals can save into their account and earn a bonus on any new payments until their 50th birthday. Accounts will stay open and savings will continue to earn interest or investment returns after 50.
This depends on your provider