Joe Farmer (34) explains why he and his wife Rachel (34) each took out a lifetime ISA to tick off their bucket list when they retire, and how they will use free government bonus to get an extra holiday. Joe, who works in business assurance, and Rachel, a teacher, recently celebrated their first wedding anniversary and live in South Gloucestershire with their son Finn (2) and their cat Nala.
Myself and my wife Rachel each opened a Lifetime ISA with OneFamily four years ago. We wanted these saving pots to be separate to our pensions, to build up a fund that we can use to travel the world when we retire.
We knew lifetime ISAs can be used only to either buy your first property or save for retirement. Rachel and I were already on the property ladder, but as the government tops up an extra 25% every time you save, we decided this would be good to have alongside our pension pot for later in life.
As a family, we really enjoy travelling and we recently went to Australia. Finn had an amazing time as he absolutely loves the beach. Rachel and I are looking forward to being able use the money we save, as well as the government bonus, to visit places we’ve always wanted to go to. So far, Japan and Nashville are at the top of our list, and we also want to visit Jordan to see Petra.
We each pay into our lifetime ISA accounts by direct debit every month. When we first opened our accounts, we each put in £25 per month, which we increased to £30 after three years. We don’t have a specific target amount at the moment, and we are just saving what we can. We plan to continue to save £30 a month each up to age 50 but, we won’t be able to withdraw the money without penalty until we’re 60. By this time, we will have received a free government bonus of around £3,500, which is enough for us to go on at least one more extra trip.
We live in between my family and Rachel’s family, which is really helpful when it comes to looking after Finn. We may consider moving at some point, depending on schools, but at the moment we are really happy with the area. I work hybrid and go into the office twice a week which is handy when you are looking after a young child and changing nappies! Rachel works as a teacher; she’s been working part-time since being on maternity leave and is going back to full-time in September.
I definitely see having a lifetime ISA as a positive thing, especially as it adds up for some brilliant trips. We like having a savings account for retirement that is completely separate to our pension. It’s great to have the bonus on top of our contributions and we’re really looking forward to all the travelling this will allow us to do in retirement.
Notes to Editors
*Please note this is an estimate based on a projection by OneFamily and includes any fees and fund charges (Lifetime ISA – UK Stocks and Shares LISA | OneFamily). These projections are based on a medium (5%) rate of growth. Please remember that projections are not a guarantee of future performance.
The OneFamily Lifetime ISA savings calculator can be found here.
What is a lifetime ISA?
Lifetime ISAs are a product set up by the UK government to help people either buy their first home or save for retirement (from the age of 60).
The government tops up lifetime ISAs by 25%, so for every £100 you save, it will give you an extra £25 on top. You can’t save more than £4,000 in your lifetime ISA each tax year so the biggest government bonus you can get is £1,000 a year.
Please note, there is a penalty charge for taking your money out within 12 months or not using it for your first home or for retirement. This is known as the government withdrawal charge.
As with all ISAs, lifetime ISAs are tax-free. This means that no matter how much your investments grow by, you won’t pay any tax on the money you make. Our Lifetime ISA invests in stocks and shares, therefore it has good potential to grow over the long-term but the value can go down as well as up.
Once opened, you can continue contributing to your lifetime ISA until you are 50.
The be eligible to open a lifetime ISA, you must be:
- A UK resident
- Aged between 18 and 39
For more information about lifetime ISAs and for the OneFamily Lifetime ISA calculator, visit our OneFamily Lifetime ISA page
About OneFamily
OneFamily is a member-owned financial services company that offers lifetime ISAs, lifetime mortgages, junior ISAs, child trust funds, bonds and over 50s life cover.
We have over 45 years’ experience of being a trusted provider of financial solutions, with nearly 2 million customers and over £5.5 billion in funds under management at the end of 2022.
We are the UK’s biggest child trust fund provider, holding over 25% of the market.
Supporting our members and their communities
At OneFamily, we’re owned by our members for our members – and doing right by them is at the heart of our business.
We don’t have shareholders to pay dividends to, so we reinvest our profits to provide quality products and services for the benefit of our members.
We think that financial products should be accessible to everyone regardless of how much money they have to invest. That’s why our products have low investment levels and minimum contributions, giving more people the opportunity to save regardless of their circumstances.
Inspiring Better Futures
Our Inspiring Better Futures vision underpins our commitment to doing the right thing at every level for our members and customers, colleagues and communities.
The Inspiring Better Futures vision is built on 3 pillars – Members and customers, colleagues and communities.
Our focus is on long-term sustainability, so we can continue to be relevant and impactful to our members and communities.
Access to education and training
The costs of further education and training can be a barrier to many young people and their families. This is why we offer OneFamily customers the opportunity to apply for a Young Person’s Education Grant of up to £250 – for someone aged 15-19 – to help meet these costs, when they would otherwise struggle without financial assistance. The grant can be used towards study materials, specialist uniform, travel costs or a laptop/tablet.
Applications are open throughout the year, and grants are awarded following a random computerised draw.
We’ve improved the lives of over 3,400 people through our individual grants since 2015.
Charity Partnerships
Supporting our communities has been a key focus of ours for many years. We’ve established partnerships with local and national charities that champion access to education and improving life chances for people from disadvantaged backgrounds.
For more information on how we support our members and communities see:
Education Grants
Charity Partnerships