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What is a lifetime ISA?

A lifetime ISA is an ISA that comes with a government bonus to help you save either for your first home or for retirement.

Why use a lifetime ISA to save for your first home deposit?

You'll get a 25% bonus on everything you save in your lifetime ISA. So, for every £4 you invest, the government adds another £1 bonus into your lifetime ISA. As you can invest up to £4,000, there's a maximum of £1,000 bonus money available each year.

As well as the bonus, you can also get interest on your lifetime ISA if you open a cash lifetime ISA, or potentially grow it by through investing if you choose a stocks and shares lifetime ISA.

Stocks and shares ISAs tend to have more potential to grow over the long term, but they also come with the risk that the value of your investment could go down.

OneFamily's Lifetime ISA invests in stocks and shares so its value can go down as well as up meaning you could get back less than has been paid in.

Find out about the differences between cash and stocks and shares lifetime ISAs.


    The lifetime ISA rules

    • You must be aged 18 - 39 to open a lifetime ISA. You can pay money in until you turn 50.
    • You can invest up to £4,000 in a lifetime ISA each tax year. But if you're paying into another type of ISA as well, be aware that the total amount you can pay into ISAs is £20,000 each tax year (tax year runs April to April).
    • If you take money out for anything other than buying your first home (through your conveyancing solicitor), the government will charge you 25% of everything you take out - which will be more than the bonus they gave you. But after you turn 60, you can take money out for anything you like without being charged.
    • Your lifetime ISA must be open, with money in it, for at least a year before you use it to buy your first home, otherwise you'll be charged the 25% government withdrawal charge.
    • You can transfer to a lifetime ISA from a cash ISA, stocks and shares ISA, or matured Child Trust Fund - so long as the value is £4,000 or less. The same applies to anyone under 40 with a Help to Buy ISA.

      Lifetime ISA eligibility

      To open a lifetime ISA you must be:

      • a UK resident
      • aged between 18 and 39 (inclusive)

      Once opened, you can keep paying into your lifetime ISA until you turn 50.

      You can transfer a lifetime ISA that you hold with another provider to OneFamily. Find out about transferring your lifetime ISA.

      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 to use a lifetime ISA for first-time buyers

      When you buy your first home, you'll need to ask your conveyancing solicitor to take money out of your lifetime ISA to put towards your deposit. There are few important points to consider:

      You need to have you lifetime ISA open, with money in it, for at least a year before you buy your first home
      The home you buy 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 valued at £450,000, or less, and you'll need to be using a mortgage as well as your lifetime ISA
      The property must be in the UK

      How to use a lifetime ISA for retirement

      After your 60th birthday you can withdraw money from your lifetime ISA, tax-free and without paying any withdrawal charges. Tax advantages depend on your individual circumstances and could change in the future.

      You must be under 40 to open a lifetime ISA. You can keep investing in your lifetime ISA until you turn 50, but you will have to pay a government withdrawal charge if you take money out before you turn 60 (unless it's to buy your first home)

      If you're self-employed you may want to use a lifetime ISA instead 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 already have some money saved for retirement, or you're not sure whether a pension or a lifetime ISA is right for you, it might be worth speaking to an independent financial adviser

      Open a lifetime ISA with OneFamily

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

      Open a OneFamily Lifetime ISA

      Looking for more information on our Lifetime ISAs?

      Read our lifetime ISA FAQs or use our lifetime ISA calculator to see how your investments could grow over time.

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