What is the Lifetime ISA?
The government wants to help young people save flexibly for the long term and ensure they do not have to choose between saving for retirement and saving for their first home.
From the 6 April 2017 any adult under 40 will be able to open a new Lifetime ISA.
What is the benefit of a Lifetime ISA?
You can save up to £4,000 each year and will receive a 25% bonus from the government on every pound you put in.
Contributions can continue to be made with the bonus paid up to the age of 50. Funds can be used to buy your first home with the government bonus at any time from 12 months after opening the account, and can be withdrawn from the Lifetime ISA with the government bonus from age 60 for use in retirement.
Is there a limit to the property I can buy?
The government will set the limit for property purchased using Lifetime ISA funds at £450,000. This limit will apply nationally.
What about the recently launched Help to Buy ISA?
You can continue to open a Help to Buy: ISA until November 2019, as planned.
You can also choose to open a Lifetime ISA, but will only be able to use the government bonus from one of your accounts to buy your first home.
Check out the latest Best Buy Lifetime ISA's at Money Saving Expert.