Despite a relatively low-key launch, the Lifetime ISA, or LISA as it is often referred to, is proving popular with young savers. So far, 28,000 savers have opted for the cash edition of the product and early indications are that the stocks and shares version is proving equally attractive.
The LISA is a tax-free account designed for those aged 18 to 40 wanting to save for their first home, or until they are 60. The added attraction is the generous bonus of 25%, meaning that for every £4 saved, the government will add £1; any savings put in before your 50th birthday will receive the 25% bonus from the government at the end of the tax year.
There is no maximum monthly contribution; savings can be as little or as much as you like up to the annual limit of £4,000, though they count against your overall £20,000 annual ISA allowance. For those who hold their LISA for the maximum allowable number of years and contribute up to the annual limit, this could mean they would qualify for total bonuses worth £32,000.
The information within the article is purely for information purposes only and does not constitute individual advice.