What is a Lifetime ISA?

A Lifetime ISA is an Individual Savings Account (ISA) for those aged 18-39 to help those saving towards your first home or later life over 60.

Lifetime ISA rules in a nutshell:

  • You can contribute up to £4,000 into your Lifetime ISA each year, subject to contributions made to other types of ISA. Your total ISA annual allowance - including your Lifetime ISA - is £20,000.
  • To open a Lifetime ISA, you will need to be aged between 18 and 39. You can continue to pay into your Lifetime ISA until age 50.
  • You get a 25% government bonus when you use your Lifetime ISA to buy your first home or to pay for your retirement from age 60. For every £4 you save the Government tops this up with a £1 bonus, up to a maximum of £1,000 in this current tax year.
  • Anyone under 40 with a Help to Buy ISA can transfer the balance to a Lifetime ISA up to the £4,000 annual limit.
  • Withdrawals can be made for the purchase of your first home in the UK, or from age 60 towards your retirement. Withdrawals that are not for a first time house purchase or not after age 60 will be subject to a 25% Government withdrawal charge. This means you could get back less than you pay in.
  • To avoid incurring a 25% Government withdrawal charge on the amount withdrawn, you must have held a Lifetime ISA for at least 12 months before it can be used for first time house purchase.
  • Lifetime ISAs can save in cash or invest in stocks and shares. While stocks and shares tend to provide greater potential for growth over the long term, investment also comes with the risk that the value of your investment could fall.

Watch our Lifetime ISA video

Find out how you could get a £1,000 government bonus towards your first home or retirement with the OneFamily Stocks and Shares Lifetime ISA.

How much can I save with a Lifetime ISA?

In the current tax year you can contribute up to £4,000 in a Lifetime ISA.  The 25% government bonus is paid monthly straight into your Lifetime ISA and calculated based on the contribution you've make that month.

For example, if you contributed £200 in January, you would receive a £50 bonus from the government. You can receive up to £1,000 in government bonuses in the current tax year.

You will continue to get this government bonus added to your contributions until age 50, when payments into the account must stop.

Lifetime ISA - how much can I save

How to use a Lifetime ISA
as a first-time buyer

You can withdraw all or some of your Lifetime ISA balance when you purchase your first home, but there's a few important points to consider:

  • You need to save into the account for at least 12 months before purchasing your first home
  • The home you purchase must be for you to live in - you can't rent it out as a buy-to-let
  • The property you buy needs to be below £450,000 and you'll need to be using a mortgage as well as your Lifetime ISA
  • The property must be located in the UK

How to use a Lifetime ISA
for retirement

After your 60th birthday you can withdraw some or all of your savings, tax-free and without penalty. Tax advantages depend on your individual circumstances and could change in the future.

  • If you're self-employed you may want to use a Lifetime ISA in place of a company pension. A Lifetime ISA doesn't come with the same benefits as pensions, but could be a useful way of topping up your savings ready for retirement
  • If you've already got savings, or you're unsure about whether a pension or Lifetime ISA is right for you, it might be worth speaking to an independent financial adviser

Ready to apply?

Find out more about our Lifetime ISA, which invests in stocks and shares, and apply here:

OneFamily Lifetime ISA

Looking for more information on our Lifetime ISAs?

Read our Lifetime ISA FAQs