A Lifetime ISA (LISA) is a type of savings account that offers a tax-free bonus of 25% on contributions up to £4,000 each year until the age of 50. It was created to help savers purchase their first home or save for retirement, with an overall cash ISA allowance limit of £20,000.

You must be aged between 18-39 to be eligible for a lifetime ISA, you can save into it up to the age of 50. Once you turn 50, the current amount in the ISA will keep accruing interest but you can't pay any more money in.

Contributions must be made before the age of 40 and money can be withdrawn at any time after the age of 60, or used as part or all of a deposit on a first home that costs up to £450,000. The difference between a pension and a lifetime ISA is that you an access funds held in a lifetime ISA however withdrawals for other purposes will incur a 25% penalty charge.

This only applies to residential properties, lifetime ISAs can't be used for buy to let property purchases.

The Lifetime ISA provides an attractive way to save with a generous tax-free bonus from the government. It can also help those who are unable to save for a deposit on their first home, or those looking to invest for retirement. With careful planning, it could be a great way to boost your savings and reach your goals sooner.

It’s important to remember that investments can go down as well as up and you could get back less than you put in. Before investing, make sure to research the different options available and consider any risks carefully. If you’re not sure, speak to a financial adviser who can help you decide what’s best for your individual circumstances.

Lifetime ISAs provide a great opportunity to save for the future. With careful planning, you could make the most of your savings and benefit from a 25% government bonus. Start saving today and make your dreams come true!

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