Which Banks Offer a Lifetime ISA?
Which Banks Offer a Lifetime ISA?
The Lifetime Individual Savings Account (LISA) is a tax-free savings account that was introduced by the UK Government in April 2017. It’s designed to help people save for their first home or retirement. The LISA offers a 25% bonus on contributions up to £4,000 per year, making it an attractive option for those looking to save for the future. But which banks offer a Lifetime ISA? Let’s take a look.
What is a Lifetime ISA?
A Lifetime ISA (LISA) is a tax-free savings account that was introduced by the UK Government in April 2017. It’s designed to help people save for their first home or retirement. The LISA offers a 25% bonus on contributions up to £4,000 per year, making it an attractive option for those looking to save for the future.
Benefits of a Lifetime ISA
There are several benefits of opening and contributing to a LISA:
- Tax-free savings: All contributions made into your LISA are free from income tax and capital gains tax, meaning you can keep more of your money and watch it grow faster.
- 25% bonus: The government will add an extra 25% bonus on top of any contributions you make into your LISA each year, up to £1,000 per year. This means that if you contribute £4,000 into your LISA each year, you will receive an additional £1,000 from the government as a bonus!
- Low minimum deposits: Most banks require only small deposits when opening a LISA – typically around £25 – so it’s easy and affordable to get started saving with one.
It is worth noting that you are locking the cash away with a view to only withdraw the funds for purchasing your first home, or for retirement. You are able to withdraw your funds without this being the reason, but you will face a penalty for doing so which will wipe out the bonus AND some of your own cash.
Which Banks Offer A Lifetime ISA?
There are several banks and building societies that offer Cash Lifetime ISAs in the UK including:
Moneybox - 3.5% for new customers
Beehive Money - 3.0% - I haven't had much experience with this one but worth a look!
Paragon BS/ Skipton BS/ Newcastle BS - 2.5% across the board for these Building Society offerings
For Stocks & Shares Lifetime ISAs our top picks would be:
Nutmeg* (Get 6 months fee-free via this link)
Moneybox (as mentioned above)
Conclusion
The LISA is an attractive option for those looking to save for their first home or retirement as it allows them to benefit from tax-free savings as well as receive an additional 25% bonus from the government each year on contributions up to £4,000 per year. There are several banks that offer this product including Moneybox, Beehive Money and a variety of building societies so be sure to compare them all before deciding which one is right for you!
It's also well worth considering whether a Stocks & Shares Lifetime ISA would be a good choice for you!