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How to get the most from your Lifetime ISA account
A lifetime ISA (LISA) is a savings account whereby you can save to help contribute to your first house purchase or to be used at the point of which you retire. It can be opened by anyone in the UK as long as you are between the ages of 18 and 39. This is a great source of saving towards your first home.
Please do also consider this article along with our article on the Help to Buy ISA to decide which one is suitable for you to use towards your first home. Please note that if you do not have a Help to Buy ISA you will not be able to open this as the scheme is closed to new customers. If this is the case the LISA can offer you an alternative which can prove to be more efficient in saving you money quickly.
The LISA allows account holders to save £4,000 annually into the account and the government will then contribute 25% of this to your account each year. This means that you could earn an additional £1,000 if you save the full £4,000 each year. On top of this you will earn interest on the account balance on an annual basis depending on the LISA provider. You can also keep the lifetime Isa active until you retire and still have the benefit of the government bonus each year even after using the funds and bonus towards your first house purchase,
The main advantage to a LISA account over the Help to Buy ISA is that you can use the balance plus the bonuses towards a purchase of a property up to the value of £450,000. The Help to Buy ISA can only be used towards purchases up to £250,000 outside of London and up to £450,000 in London.
Another main disadvantage to the LISA is that you are charges if you withdraw the funds before either buying your first home or retirement, the fees can be hefty (up to 60%) the Help to Buy ISA does not have any charges for withdrawing your savings and this can be accessed immediately. If you have any questions about using your lifetime ISA towards your first house purchase, please do let the team at Johnson Astills know and we will be happy to assist.
If you are a first-time buyer and looking to purchase a property our Conveyancing team at Johnson Astills can assist you and provide you with further information regarding any conveyancing queries. Please contact us at our Leicester Office or Loughborough Office on 0116 2554855 or 01509 610312