A Lifetime ISA (LISA) is a savings account for a first home or retirement. The pictures above show how the bonus works. Here are the rules that matter and the catch.
The rules that matter
- You must be 18 to 39 to open one, and you can keep paying in until you are 50.
- You must have held it for 12 months before using it for a home.
- The home must cost £450,000 or less and you must be a first-time buyer.
- You can pay in up to £4,000 a tax year, and it counts towards your £20,000 ISA allowance.
The catch
Taking money out for anything other than a first home or retirement costs a 25% penalty, which is more than the bonus you received. Only put in money you will not need for anything else.
Buying with someone
Each of you can have your own LISA and use both bonuses on the same home, as long as you are both first-time buyers.