LIFETIME ISA RULES
Lifetime ISA’s (or LISA’s as they often referred to as) are Individual Savings Accounts (ISA) designed specifically to help young people to either save to buy their first home or to save for their future or perhaps even both.
In order to qualify for a Lifetime ISA, you must be ages between 18-39, so if you are fast approaching 40, you can still open one and continue to pay in until you are 50.
You can open a cash LISA or stocks & shares LISA depending on your personal circumstances and requirements.
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How Much You Can Save Via Lifetime ISA?
The maximum a year you can invest is £4,000, which counts towards your annual ISA limit which for 2019/20 is £20,000. The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year.
You can withdraw money from your ISA if you’re:
- buying your first home
- aged 60 or over
- terminally ill, with less than 12 months to live
If you wish to withdraw all or some monies from the Lifetime ISA for any purpose other reason, then a 25% penalty will apply.
Couples can also benefit by both investing into a Lifetime ISA. You both then have the ability to earn the annual bonus and this can be combined to buy a property together in the future.
You can also contribute into an ISA on behalf of someone else as long as they qualify. Perhaps you wish to invest for a child and grandchild to help them invest for their future. The beneficiary will have to open the account but you can invest your own savings. So, do check the Lifetime ISA rules before applying.
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