You can use a Lifetime ISA to buy your first home or save for later life. You must be 18 or over but under 40 to open a Lifetime ISA. You can save up to £4,000 each year into your Lifetime ISA and the Government will add a 25% bonus to your savings, up to £1,000 per year.
You can withdraw from a Lifetime ISA if you are buying your first home, if you are aged 60 or over, or in the event that you are ill with less than 12 months to live. If you make a withdrawal for any other reason (which is know as an unauthorised withdrawal) you will incur a withdrawal charge penalty. Usually, the withdrawal charge will be 25% of the amount withdrawn but this has been temporarily reduced to 20% until 5 April 2021 to help investors withdraw funds from their LISA during the coronavirus pandemic. The withdrawal charge will revert to 25% on 6 April 2021.
A withdrawal charge may arise if you intend to use a LISA to purchase your first home if you have at some time owned or inherited a property. If you think that this might apply to your situation, then we will be happy to discuss this with you.
Please do not hesitate to contact us if you would like to discuss this further.