Lifetime ISA FAQs

A lifetime ISA is a shortcut to potentially owning your own home or a way to boost your savings for life after 60!

It's a type of individual savings account (ISA), designed specifically to help first-time buyers onto the property ladder or to help people save more for later life. It's available exclusively to people aged between 18 and 39.

Here's how it works.

Every time you pay in, the government does too. In fact, it'll pay in 25% of however much you pay in!

So, if you put in £100, the government pays in £25.

If you put in the maximum yearly amount (per tax year), which is £4,000, then you'll get a whopping £1,000 simply for choosing to save in a lifetime ISA. And you can do the same the next tax year.

But there are a few crucial details you need to know if you're weighing up whether a lifetime ISA is for you:

• Everything you pay in comes out of the £20,000 annual ISA allowance.
• There are two types of lifetime ISA to choose between: cash or stocks and shares. OneFamily offers a stocks and shares lifetime ISA.
• The property you buy can't cost more than £450,000 and must be somewhere you intend to live.
• If you take money out of your lifetime ISA for anything other than a deposit for buying your first home, you'll be charged a government withdrawal charge (unless you've turned 60 by then).
• If you take money out within 12 months of the date you made your first payment in (even if it's to buy your first home), you'll have to pay the government withdrawal charge.

You can find out more about lifetime ISAs in our 'What is a lifetime ISA?' guide.

Does a lifetime ISA sound right for you? Head to our main lifetime ISA page to get yours open

If you're aged between 18 and 39 (inclusive), haven't paid into a lifetime ISA this tax year and a UK resident, then yes!

Just make sure you check the lifetime ISA rules to make sure it's the right product for you.

You're also eligible if you're a Crown employee serving overseas and you're paid out of public revenue (or you're married to someone who fits that description).

You can't open a lifetime ISA if you're a US national (including dual nationals).

Is a lifetime ISA right for you? Head to our main lifetime ISA page to get yours open

There are two types of lifetime ISAs: stocks and shares and cash. We offer a stocks and shares lifetime ISA only.

Find out the differences between cash and stocks and shares in our 'Lifetime ISA: cash or stocks and shares?' guide.

Does our Lifetime ISA sound right for you? Head to our main lifetime ISA page to get yours open

Put simply, it's all about how they make money.

Cash lifetime ISAs grow by building interest, like some regular savings accounts do. You can’t lose money but the amount you make (on top of the 25% government bonus) depends on current interest rates so there's less risk but also less potential for growth.

With stocks and shares ISAs, your money (and the 25% government bonus) is invested in a fund and used to buy investments: things like shares in companies, property and corporate and government bonds.

Your money grows or shrinks as the value of those assets changes.

So, stocks and shares lifetime ISAs have more potential to grow, especially over the long term, but the value can go down as well as up and it's possible you could get back less than you’ve put in.

Read our guide on 'Lifetime ISA: cash vs stocks and shares' to find out more.

Is a stocks and shares lifetime ISA right for you? Head to our main lifetime ISA page to find out about the one we offer and get yours open

You certainly can. But keep in mind that you can only:

• • open one lifetime ISA each tax year (tax year runs from 6 April to 5 April the following year)
  • pay into one lifetime ISA during each tax year (even if they’re with different providers)
  • use one lifetime ISA to buy your first home.

You can keep your lifetime ISA open after you’ve bought your first home and use it to save for later life.

You'll be able to keep paying in until you're 50, and can withdraw the money penalty-free from your 60th birthday.

Find out about lifetime ISA allowances and limits.

Ready to open your lifetime ISA? Head to our Lifetime ISA page to get started

The most you can pay in is £4,000 each tax year (tax year runs 6 April – 5 April the following year).

Anything you pay in also comes out of your overall yearly ISA allowance. You can put up to £20,000 into ISAs each tax year, which includes any money you pay into a lifetime ISA.

So, if you max out the £4,000 lifetime ISA limit, you can still pay £16,000 into other ISAs in your name during that tax year. Then on 6 April the limits all reset, no matter how much you've paid in.

Just so you know, the government bonus (up to £1,000 each tax year) doesn’t count towards the £20,000 overall ISA limit or the £4,000 lifetime ISA limit.

Still got questions? Find out more about the lifetime ISA allowance in our lifetime ISA limits article. Or find out how much you could potentially put away with our lifetime ISA calculator.

Ready to get a lifetime ISA? Head to our main lifetime ISA page to get yours open

Sadly not.

But! Opening one each actually has its benefits. You can both use a lifetime ISA towards your deposit on the same property. So between you, you can get double the bonus to use towards your first home together!

Of course, you must both be first time buyers and meet all the lifetime ISA eligibility criteria.

Ready to start using a lifetime ISA to save for your first home? Head to our main lifetime ISA page to get yours open

Absolutely!

You can transfer your help to buy ISA into a OneFamily Lifetime ISA, as long as you have no more than £4,000 in your help to buy ISA.

That's because you need to transfer the full amount that's in your account and can't transfer more than £4,000.

If you have more than this in your account, you could consider withdrawing and opening a new lifetime ISA or checking other lifetime ISA providers.

Just so you know, the money you transfer will count towards the lifetime ISA allowance limit for this tax year (which is £4,000). 

If you’re looking to transfer your help to buy ISA to a lifetime ISA, head to our Lifetime ISA transfer page to find out more.

Yes, you can.

If you already have a help to buy ISA, you can also open a lifetime ISA. But you can only get the government bonus on one of them so when you buy your first home you won't get the help to buy ISA bonus.

You can also transfer a help to buy ISA into a lifetime ISA.

Not sure on your next move? Find out more about the differences between help to buy ISAs and lifetime ISAs to work out what's right for you.

The government withdrawal charge is a fee that HMRC charge you when you withdraw money from your lifetime ISA in a way that breaks the rules.

It's 25% of everything you take out, so if you want £100, you'll need to withdraw £133 to pay HMRC 25% of what you've taken out (£100 is 75% of £133).

But, don't worry, the charge can be avoided as long as you use your lifetime ISA in the way it was intended.

You'll be charged if you withdraw money:

• within 12 months of the first time you pay into your lifetime ISA, or
• to use for anything other than buying your first home (unless you've turned 60), or
• if you use it to buy a home for more than £450,000, don't intend to live there or don't buy with a mortgage.

The government withdrawal charge is more than the government bonus you'll have received on the money you withdraw. That's because it's 25% of the total amount you take out, which includes the bonus already added.

You can find out more about the lifetime ISA withdrawal charge here.

Happy that you can stick to the rules? Open your lifetime ISA here

We're glad you asked!

To get your OneFamily Lifetime ISA open, simply visit the main Lifetime ISA page, where you'll find the information you need to help you decide if it's the right product for you.

When you're ready, click on the 'Open a Lifetime ISA' button. It'll take about 10 minutes from this point.

You'll first be asked to choose an investment style - cautious, balanced or adventurous - which relates to how comfortable you are with investment risk and dictates which of our three climate-focused funds your money will be invested in.

Then, you'll need to let us know how you want to pay money in. This could be a lump sum (one-off payment) or by Direct Debit.

You'll need your National Insurance number and you may be asked to provide some ID.

Yes, you can.

You'll need to provide ID for the policy owner and the Power of Attorney (POA), as well as the Power of Attorney documents.

You'll be told what documents and certification is needed once you've completed the application.

Ready to open a Lifetime ISA? Visit the main Lifetime ISA page

Investment risk is about how likely you are to lose money.

When you invest, the value of your money goes up or down depending on how the "assets" that it's invested in perform. That could be things like company shares or bonds, for example.

So, if the value of those assets goes down, your investment will be worth less. But that only really becomes relevant when you want to take your money out. While your money is still invested, it has the potential to grow again.

It becomes a problem if you need your money when the value is lower. That's why we recommend only investing money that you don't expect to need at short notice. You should also have an emergency fund to cover any unexpected costs.

Of course, you can look at it the other way. Investing your money gives it more potential to grow and to keep up with inflation and house prices. You take on the risk of losing money, as well as the potential to make some.