A Lifetime ISA (LISA) is a type of government-backed savings account that comes with 25% government bonuses (up to £1,000 per tax year). It can be used towards buying your first home, or to fund retirement from age 60.
With a LISA, you can pay in up to £4,000 per tax year, and you'll get a free government bonus of 25% what you have put in, up to £1,000 per tax year. These take 4-6 weeks to land in your account.
There are some things to be aware of before you apply for a Lifetime ISA:
You must have your LISA open for at least 12 months before you can use it to buy a home.
You must be aged between 19-39 years old to open a LISA and make your first payment into the account before you're 40 years old.
You can put up to £4,000 in each tax year until you're 50 years old
If you withdraw your funds to use for something other than purchasing your first home, or funding retirement once you've reached 60, you'll be subject to a withdrawal charge, meaning you may get back less than you paid in.Read more here
If you want to use a Lifetime ISA to purchase your first home, the property you buy must:
Be in the UK,
Be your first home anywhere (not just in the UK),
You also have to live in the property once you buy it (i.e. you can’t use a LISA to buy a property you want to rent out), and
You need to be using a mortgage to buy the property (i.e. you can’t pay for it in full upfront).
From the 29th October, If your property is worth more than £450,000, you can still use your LISA towards your purchase, however this will be subject to a 20% fee from HMRC. If this is you, you can process your request in the Tembo app as normal. Got questions? You get in touch with our home purchase team via [email protected]
You can find all the information you need to know about LISAs here