How the new Lifetime ISA works
TIM BENNETT LOOKS AT THE KEY FEATURES OF THIS NEW SAVINGS PRODUCT AND POINTS OUT SOME OF THE HIDDEN PITFALLS.
How Lifetime ISAs work
Why the government launched the LISA
Who can have one?
How it works
- A first time property purchase of a property not exceeding £450,000 in value
- Retirement from the age of 60
- Death or the diagnosis of a terminal illness
Which is better – a LISA, an ISA or a SIPP?
18 (adult ISA)
18 (adult SIPP)
39 to open, 49 to contribute
75 (for tax relief)
Basic rate tax relief on contributions @20%
Higher rate tax relief on contributions
Tax free growth within the wrapper
Government bonus on contributions @20%
Yes, capped at £1,000 per year, £32,000 total
First 25% only
Subject to conditions
From 55 (57 from 2028)
25% of total fund
55% (if over the lifetime allowance)