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The Lifetime ISA has been designed to help those aged between 18 and 40 to save for a new home or for their retirement. Under the scheme, the government provides a 25% bonus on yearly savings of up to £4,000, and once you start saving before you are 40,
you can continue using the scheme until you turn 50.

In total, this could see young savers investing up to £128,000 (over 32 years) and receiving a maximum government bonus of £32,000. The government bonus is paid annually at the end of the tax year. The £4,000 annual limit is part of the overall £20,000 ISA
investment limit. Lifetime ISAs can hold cash, stocks and shares qualifying investments, or a combination of both.

The money held in a Lifetime ISA can be used to purchase a first home worth up to £450,000 anywhere in the UK or withdrawn tax-free after the saver’s 60th birthday. The money invested in a Lifetime ISA can be used for other purposes but will be subject to
a 25% withdrawal charge. The only other exception is if a saver is terminally ill and given less than 12 months to live.

HMRC’s guidance has been updated to provide further information on the appeal rights available to Lifetime ISA investors.

Source: New feed