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Lifetime ISAs

LIFETIME INDIVIDUAL SAVINGS ACCOUNTS
Lifetime Individual Savings Accounts are being launched by the Government to help those aged 18 – 40 to save and invest flexibly for the long term. The aim is that people will not have to choose between saving for their first home and retirement.
GOVERNMENT BONUS
Lifetime ISA accounts will be available from 6 April 2017 and can be opened by anyone between the ages of 18 and 40. Any savings put in before their 50th birthday will receive an added 25% bonus from the Government.
Individuals can save and invest up to £4,000 each year and receive a government bonus of 25% – that’s a bonus of up to £1,000 a year, and they can use some or all of the money to buy their first home or keep it until they’re 60 – it’s up to them.
The total amount an individual can save each year into all Individual Savings Accounts is being increased from the current £15,240 to £20,000 from 6 April 2017. Further, the £20,000 ISA allowance excludes contributions to any Junior ISAs, which have their own distinct allowance applying to each child.
SAVING FOR A FIRST HOME
Any time from 12 months after opening a Lifetime ISA, individuals will be able to use their savings and bonus from one of the accounts towards a deposit on their first home worth up to £450,000 in the UK. If they have a Help to Buy Individual Savings Account, they can transfer those savings into a Lifetime ISA in 2017 or continue saving in both, but they will only be able to use the bonus from one of the accounts to buy a house.
SAVING FOR RETIREMENT
After their 60th birthday, the individual can take out all the savings tax-efficiently. If they withdraw the money before they turn 60, they will lose the government bonus (and any interest or growth on this). They will also have to pay a 5% charge.
Creating and maintaining the investment strategy which is suitable for you plays a vital role in recurring your financial future. Matthew Bromley, Chartered Financial Planner at Cowgill Holloway Wealth Management can provide the quality professional advice to help you achieve your financial goals.


This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.

Disclaimer

The information was correct at time of publishing but may now be out of date.

Wealth Management
Posted by Cowgills
21st April, 2017
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