WHAT IS A LIFETIME ISA?
- Contribute up to £4,000 each year
- Receive a government bonus of up to £1,000 for every year you invest before your 50th birthday*
- Withdraw your money tax-free for the purpose of retirement from the age of 60 or earlier for the purchase of a first home (which must cost under £450,000)
- Invest for the long-term
WHY CHOOSE A LIFETIME ISA WITH KILLIK & CO?
WHO IS THE LIFETIME ISA RIGHT FOR?
LIFETIME ISA RULES
Buying your first home:
- Your first property must be located within the UK and must not cost more than £450,000
- The Lifetime ISA must have been opened for at least 12 months for you to receive any government bonus
- The bonus is per individual, so two individuals can combine their government bonus when buying together
- If you withdraw the money before you turn 60 and it is not to buy your first home then you will incur a 25% penalty on the total sum. This is payable to the government, unless you are diagnosed with a terminal illness or upon your death.
For your retirement:
- Withdraw the money tax free on or after your 60th birthday
- The Lifetime ISA can work alongside your pension. Compare the tax-efficient wrappers in our comparison below or watch our short video here
- If you withdraw the money before you turn 60 then you will incur a 25% penalty on the total sum. This is payable to the government, unless you are diagnosed with a terminal illness or upon your death
Lifetime ISA comparison
Product | Lifetime ISA | Investment ISA | Personal pension |
---|---|---|---|
Minimum age | 18 | 18 (adult ISA) | Opened from birth |
Maximum age | 39 to open, 49 to contribute | No | 75 (for tax relief) |
Basic rate tax relief on contributions @20% | No | No | Yes |
Higher rate tax relief on contributions | No | No | Yes |
Tax free growth within the wrapper | Yes | Yes | Yes |
Government bonus on contributions @20% | Yes, capped at £1,000 per year, £32,000 total | No | No |
Tax-free withdrawals | Yes | Yes | First 25% only |
Penalty-free withdrawals | Subject to conditions | Anytime | From 55 (57 from 2028) |
Penalty rate | 25% of total fund | n/a | 25% or 55% (This charge is only payable on the value of the pension which is over and above the Lifetime Allowance of £1m) |
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