Both the Cash Lifetime ISA and Stocks & Shares Lifetime ISA give you a free 25% bonus on your contributions towards your first home or retirement, up to £1,000 per tax year.
You can put up to £4,000 per tax year into both types of Lifetime ISAs. The main difference between the two is with a Cash Lifetime ISA you'll earn interest on your balance.
With a Stocks & Shares Lifetime ISA, instead of earning interest on your savings, your money is invested - if your investments do well, you'll get investment growth over time. At Tembo, use BlackRock's MyMap5 ESG fund, which will give you returns on your money - however as with all investments please keep in mind that your money can go up, as well as down in future.
If you want to buy a home in 5-years or less, a Cash Lifetime ISA might be a better option - this is because investing should be seen as a long-term practice. Investing over a longer period gives your investments more chance to ride out any short-term fluctuations in the stock market and give you a better chance of getting a return (even though it’s not guaranteed). This is why investing is riskier than saving, as you may get back less than you invested.