What is a Lifetime ISA?
The Lifetime ISA (LISA) is a product designed by the government to help you to purchase your first home or save towards retirement.
With a Lifetime ISA, you can pay in up to £4,000 per year and you get a 25% government bonus on all savings. That means for every £4 you save, you get £1 for free. If you pay in the maximum £4,000 you’ll receive a £1,000 bonus. Over time, these bonuses could give you a real head start.
A 25% government penalty applies if you withdraw money from a Lifetime ISA for any reason other than buying your first home (up to £450,000) or for retirement. Your account also needs to be open for 12 months before you can withdraw penalty-free for a house purchase. LISAs are considered ‘open’ once you’ve made your first contribution.
With Moneybox you can choose between our market-leading Cash Lifetime ISA, which offers an interest rate of 0.6% AER (variable), made up of a 0.25% AER variable interest rate and a 0.35% introductory bonus rate for your first year, or our Stocks & Shares Lifetime ISA, which allows you to invest your savings in the stock market. Remember, as with all investing, the value of your investments can go up and down, and you may get back less than you invest.
We’ve set out the main Lifetime ISA details you need to know in our infographic below.