1289
Views

Lifetime ISA and ISA limit

The overall annual ISA subscription limit will be increased to £20,000 from 6 April 2017.

From April 2017, a new Lifetime ISA will be available for adults under the age of 40. The Lifetime ISA is aimed at helping young people save flexibly for the long-term, allowing them to save for a first home and for their retirement, without having to choose one over the other. 

A person can open a Lifetime ISA account between the ages of 18 and 40 and they will be able to contribute up to £4,000 per year, and anything put in before their 50th birthday will receive a 25% bonus from the government. This means that over a lifetime, a saver will be able to have contributions of £128,000 matched by the government for a maximum bonus of £32,000. Funds, including the government bonus, from the Lifetime ISA can be used to buy a first home in the UK worth up to £450,000 at any time from 12 months after the account opening, and be withdrawn from age 60. If a person withdraws their money before they are 60 (unless they have a terminal illness) they will lose the government bonus (and any interest or growth on it) and will also have to pay a 5% charge.

Individuals will be able to transfer savings from other ISAs as one way of funding their Lifetime ISA. During the 2017/18 tax year only, those who already have a Help to Buy: ISA will be able to transfer those funds into a Lifetime ISA and receive the government bonus on those savings.

Tags:
Rate:
 
Added By: Luke Noble on 21st Mar 2016 - 16:59
Number of Views: 1289
Got A Question?

If our news items leave you with a question you need answering, let us know using one of the following:

  1. Call us on 01252 522221
  2. Email us
  3. Use our enquiry form
  4. Use the comments form below

We're happy to help.