On the 6th April 2017. The New Lifetime ISA launches with a massive bonus of 25% paid annually. This new type of ISA comes with some attractive incentives from the Government. With savings rates being so pitiful over the last few years it’s not surprising people aren’t saving. The government is understandably concerned that young people are struggling to put money by for a new home. Also saving for retirement is a long way off many people’s thoughts as people are concentrating on the day to day. This new account has been launched encourage people to save for their future. If you are under 40, that is born after 7th April 1977 you are eligible to apply.
ISAs are largely considered to be irrelevant due to the changes in tax allowances on savings accounts. However if you qualify and can commit to long term savings this is very much the account for you. Take advantage when the New Lifetime ISA launches with a massive bonus of 25% paid annually. Remember to open it as soon as you can to take advantage of the bonus until you turn 50.
What can the LISA be used for?
The LISA can be used for buying a house if you are a first time buyer. Just let the account provider know you are buying and they will send the money to your conveyancer. You can also use the account to save for your retirement. You can access your cash when you reach 60 and you don’t have to take it all at once. The account can be kept open after your 60th birthday or you can move it to another account. If you want to get at your cash before this there is a hefty 25% fee to pay. Probably best to leave it in there if you can as only consider withdrawing as a last resort.
Are there any limits to the account?
£4000 is the maximum you can save each year. Pay the full amount at the start or build up to that amount, it’s up to you. At the end of the year the government will add 25% bonus on top. If you can pay in the full amount then you will get £1000 at the end.
Where can I open a Lifetime ISA?
The major banks haven’t yet released any products or given a launch date so far however there are a couple of providers who say they will be ready for the launch in April. It is a matter or keeping an eye out as the new LISAs come available. If you are keen to get an account open, you can always set it up with the early providers. Once it is up and running and you see a better deal elsewhere then you can switch providers. This is Money have more information on this and how to look for providers.