Yusra3
VIP Contributor
Lifetime Individual Savings Accounts (LISAs) offer a tax-efficient way for Britons to save for a first home or retirement. Here’s how LISAs work to grow your money plus the top providers to open an account with.
The Basics
Like traditional ISAs, Lifetime ISAs let you save or invest up to £4,000 tax-free each tax year. The added bonus is the 25% government bonus topping up whatever you contribute annually.
Home Buying and Retirement
Withdrawals are tax-free if used towards a first home purchase up to £450,000 or anytime after age 60. This flexibility makes them a strong savings vehicle for millennials balancing both mid and long-term priorities.
Watch Out for Penalties
Withdrawing early for any other reason subjects the amount withdrawn to a 25% penalty, although you can redeposit later to a LISA without penalty as long as overall contributions don’t exceed annual limits.
Top Providers
Moneybox – Best for Low Cost Simplicity
Easy to use app and low annual management fee of just 0.45%.
Nutmeg – Best for Socially Responsible Investing
Nutmeg builds fully digital socially responsible investment LISA portfolios. Management fees from 0.75% to 0.89%.
AJ Bell – Best for Hands-On Investing
Open a LISA easily online and choose your own investments à la carte or access ready-made portfolios.
Hargreaves & Lansdown – Best for High Service Model
Higher annual fees from 0.45% to 1.5% but wealth of investment choice and guidance.
Don’t Leave Free Government Money on the Table
As long as you understand withdrawal restrictions, the 25% lifetime ISA government contribution provides too sweet an offer to pass up for young savers and investors. Prioritize contributing by April 5th annually up to limits before losing out!
The Basics
Like traditional ISAs, Lifetime ISAs let you save or invest up to £4,000 tax-free each tax year. The added bonus is the 25% government bonus topping up whatever you contribute annually.
Home Buying and Retirement
Withdrawals are tax-free if used towards a first home purchase up to £450,000 or anytime after age 60. This flexibility makes them a strong savings vehicle for millennials balancing both mid and long-term priorities.
Watch Out for Penalties
Withdrawing early for any other reason subjects the amount withdrawn to a 25% penalty, although you can redeposit later to a LISA without penalty as long as overall contributions don’t exceed annual limits.
Top Providers
Moneybox – Best for Low Cost Simplicity
Easy to use app and low annual management fee of just 0.45%.
Nutmeg – Best for Socially Responsible Investing
Nutmeg builds fully digital socially responsible investment LISA portfolios. Management fees from 0.75% to 0.89%.
AJ Bell – Best for Hands-On Investing
Open a LISA easily online and choose your own investments à la carte or access ready-made portfolios.
Hargreaves & Lansdown – Best for High Service Model
Higher annual fees from 0.45% to 1.5% but wealth of investment choice and guidance.
Don’t Leave Free Government Money on the Table
As long as you understand withdrawal restrictions, the 25% lifetime ISA government contribution provides too sweet an offer to pass up for young savers and investors. Prioritize contributing by April 5th annually up to limits before losing out!
