How could a lifetime ISA help you in the process of purchasing your first property?
What is a lifetime ISA?
A lifetime ISA is a tax-free savings account that can be used to buy your first home costing up to £450,000 (please note that other conditions apply) or as retirement money once you are more than 60 years old. You must be aged 18 or over but under 40 when you open a lifetime ISA. You can contribute up to £4,000 per year between the age of 18 to 49 (for a maximum bonus of £33,000) and the government will add 25% on top as a bonus to your savings excluding interest earned. For example, if you contribute the full £4,000 one year you will be entitled to a bonus of £1,000 from the government as well as any extra interest earned on top of that.
How can I withdraw money from my lifetime ISA without losing my government bonus?
Buying your first home:
- The property must cost £450,000 or less
- You must buy the property with a mortgage
- You must have money in your lifetime ISA at least 12 months before you buy the property
(please bear in mind that more conditions apply)
Saving for retirement:
You can take your savings out of a lifetime ISA without losing your 25% bonus once you are 60 or over.
LISA holders with less than 12 months to live can also take their savings out of their account without losing their bonus.
If you have any questions or require any advice specific to your circumstances, please contact us at PJCO. You can book a free discovery call by clicking the link below!