Is a stocks and shares Lifetime ISA
a good choice for you?

Unfortunately, you have to be a UK resident for tax purposes to open a Lifetime ISA. However, there are other smart ways to invest and make your money work harder:

Unfortunately, you must be 18-39 to open a Lifetime ISA. However, there are other smart ways to invest and make your money work harder:

If you withdraw your money from a Lifetime ISA before you’re 60 and it’s not to buy your first home, you’ll usually pay a 25% government penalty, so you may get back less than you put in.

This penalty will not apply to other ways of saving.

If you would like to do more research, here are the ways you can invest:

If the home you buy costs more than £450,000, you won’t be able to use Lifetime ISA savings for your deposit without incurring a 25% penalty — and you may get back less than you put in. However you could instead leave the money invested in a Lifetime ISA until you are 60 and use it then without penalty.

This penalty doesn’t apply to other ways of saving such as an ISA or general investment account although those products don’t offer the 25% bonus.

If you would like to do more research, here are the ways you can invest:

You may receive employer-matched contributions towards your workplace pension. These contributions plus the tax relief available are likely to outweigh the Lifetime ISA 25% government bonus. Your employer is not obligated to make and/or match contributions to your Lifetime ISA.

If you’re a higher rate taxpayer, you may get 40% tax relief on your pension contributions.

Additional rate taxpayers may get 45%.

If you’ve maxed out your annual or lifetime allowances for pensions, a Lifetime ISA is a further option.

If you would like to do more research, here are the ways you can invest:

You won’t have a workplace pension and won’t benefit from employer-matched contributions.

So a Lifetime ISA — and the 25% government bonus — may win over a pension, but this depends on your tax status and personal situation.

Self-employed basic rate taxpayers will receive an additional 25% via tax relief on money put into a pension, and you will need to decide whether a pension or Lifetime ISA is better for you.

Self-employed higher or additional rate taxpayers will benefit more from paying into a pension as the tax relief wins over the Lifetime ISA bonus.

If you’ve maxed out contributions on your pension(s) and you want to save more, the Lifetime ISA is a further option.

But remember, if you withdraw your money from a Lifetime ISA before you’re 60 and it’s not to buy your first home, you’ll usually pay a 25% government penalty, so you may get back less than you put in.

If you would like to do more research, here are the ways you can invest:

If you’re not employed, you won’t have a workplace pension and you won’t benefit from employer-matched contributions.

Both a pension and a Lifetime ISA may be good choices for you, and you could contribute to either or both, or to something else such as an ISA or a general investment account.

You will need to decide if a stocks and shares Lifetime ISA, a pension, ISA or general investment account are good choices for you. But remember, if you withdraw your money from a Lifetime ISA before you’re 60 and it’s not to buy your first home, you’ll usually pay a 25% government penalty, so you may get back less than you put in.

If you would like to do more research, here are the ways you can invest:

As you're saving to buy your first home costing less than £450,000, you should be able to use the full value of a Lifetime ISA, including the bonus, towards your deposit.

But remember, if you withdraw your money from a Lifetime ISA before you’re 60 and it’s not to buy your first home, you’ll usually pay a 25% government penalty, so you may get back less than you put in.

If you would like to do more research, here are the ways you can invest:

Investing is for the longer term. At Nutmeg, we suggest a minimum timeframe of three years to reduce investment risk. As you are planning to buy your house in the next three years, a cash Lifetime ISA is an alternative option.

Nutmeg doesn't offer a cash lifetime ISA.

If you would like to do more research, here are the ways you can invest: