Every time you pay into a lifetime ISA, the government gives you a bonus worth up to an extra £1,000 every tax year to help you buy your first home.
But when is this bonus paid and how can you get the maximum government bonus? Let’s dig into how the bonus works.
What is the lifetime ISA government bonus?
- The government tops up everything you pay into a lifetime ISA by another 25%.
- As you can pay in up to £4,000 each tax year, you can get up to £1,000 every tax year.
- You'll get the bonus whether you're using a cash lifetime ISA or a stocks and shares lifetime ISA.
- The lifetime ISA bonus is based on how much you pay in. You don’t get a bonus on any interest or investment growth on your money.
Lifetime ISA maximum bonus
The maximum lifetime ISA bonus you can get is £1,000 each tax year (tax year runs 6 April until 5 April the following year).
This is because you’re limited to only paying up to £4,000 each tax year. As the government bonus is 25% of everything you put in, if you max out this allowance during a tax year, you’ll get the maximum bonus: £1,000.
When is the lifetime ISA bonus paid?
The bonus on your lifetime ISA will be paid every month, based on what you paid in the previous month.
How much you get will depend on how much you paid in between the 6th of the month and the 5th of the following month, with your bonus being added to your account by the end of that month.
For example, if you pay £400 into your lifetime ISA between 6 February and 5 March, an extra £100 will be added to your lifetime ISA at the end of March.
You don’t need to do anything else to get this payment – just keep paying money in as you would with any savings account and we'll claim the bonus each month for you.
Get up to £1,000 extra towards your first home deposit every year with a OneFamily Lifetime ISA
When do I stop getting the lifetime ISA bonus?
You’ll stop receiving your lifetime ISA bonus when you stop paying money in. This could be because you have other financial commitments, have bought your first home or because you’ve turned 50.
At 50, you can’t pay into your lifetime ISA anymore, so you’ll stop receiving the 25% bonus.
Will my lifetime ISA bonus be paid before I buy a house?
Yes! The bonus will be paid into your lifetime ISA a month after you’ve put money into your account, so you can use the bonus towards your deposit.
This is different to help to buy ISAs, where the bonus is paid after you’ve bought your first home.
It’s important to keep in mind when the bonus is paid (see above!) if you’re getting close to completing on your house, so that you can make sure you have your full lifetime ISA bonus on the day you need it.
Any payments made in after you complete will still receive the bonus but you won't be able to use this towards your house purchase (you'll be able to withdraw it without paying the government withdrawal charge after you turn 60).
Open a OneFamily Lifetime ISA
Our Lifetime ISA comes with a 25% government bonus, worth up to £1,000 a year!
Our Lifetime ISA invests in stocks and shares, so the value is likely to go up and down over time. This is normal for this type on investment, but it means there is a risk you could get back less than you put in if you withdraw at a time when the value is lower.
