Lifetime ISAs explained

Help to Buy ISA’s have helped thousands of people get on the property ladder with the 25% bonus given by the Government. Unfortunately, the Help to Buy ISA will close to new accounts at midnight on 30th Nov 2019. If you have already opened a Help to Buy ISA (or do so before 30 Nov) you will be able to continue saving into your account until Nov 2029.

Even though the Help to Buy ISA is closing, anyone who is saving to buy their first home, or saving for retirement can still benefit from a Lifetime ISA.

  • The government bonus is the equivalent of a 25% interest rate on your savings. The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year.
  • Then there’s the tax benefits. The Lifetime ISA is a longer-term tax-free savings account. You won’t pay tax on any interest, income or capital gains from cash or investments held within a Lifetime ISA
  • After your 60th birthday you can take out all your lifetime ISA savings tax-free. Most pension schemes only let you take 25% of your pension pot tax-free.
  • If you’re a first-time buyer buying a property with your partner, you can both open a Lifetime ISA and get double the government bonus.

You need to be aged 18 or above but under 40 to open a Lifetime ISA. You can put in up to £4,000 each year, until you’re 50. The Lifetime ISA limit of £4,000 counts towards your annual ISA limit. This is £20,000 for the 2019 to 2020 tax year.

If you have any questions about ISA’s, or if you would like to set one up, call the team at Aspire on 01928 735510. Or you can email us .