Lifetime ISA in a nutshell


  • UK residents aged 18-39 can open a Lifetime ISA.
  • You can contribute up to £4,000 per year until you’re 50.
  • The government will give you a 25% bonus on contributions – that’s a potential £1,000 ‘free money’ every year.
  • Use your savings to buy your first home up to a value of £450,000, for anything you’d like once you’re 60, of if you’re terminally ill.
  • If you need to access your money for any other reason, you’ll pay a hefty penalty.
  • Your Lifetime ISA contributions count as part of your 2018/19 annual ISA allowance of £20,000.
  • You can contribute to both a stocks and shares Lifetime ISA and a ‘regular’ stocks and shares ISA in the same tax year.
  • As a rule of thumb, if you’re employed, your employer contributions plus the tax relief is likely to outweigh the Lifetime ISA 25% government bonus.
  • If you’ve maxed out contributions on your workplace pension and you want to save more, the Lifetime ISA could be a good option.
  • You can contribute to a Lifetime ISA for someone else provided they’re eligible.
  • Some of the rules around the Lifetime ISA are complicated. If you’re unsure if a Lifetime ISA is the right choice for you, please seek independent financial advice.

A Lifetime ISA may not be right for everyone

As with all investing, your capital is at risk. Tax rules may change in the future. If you are unsure if a Lifetime ISA is the right choice for you, please seek independent financial advice.

  • You must be 18–39 years old to open one.
  • If you need to withdraw the money before you’re 60, and it’s not for the purchase of a first home up to £450,000, or a terminal illness, you’ll pay a 25% government penalty. So you may get back less than you put in.
  • Compared to a pension, the Lifetime ISA is treated differently for tax purposes. You may be better off contributing to a pension.
  • If you choose to opt out of your workplace pension to pay into a Lifetime ISA, you may lose the benefits of the employer-matched contributions.