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Lloyds Lifetime ISA

Save for your first home and retirement at the same time

Investment ISAs put your capital at risk & you may get back less than you originally invested

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Lifetime ISA

from Hargreaves Lansdown

Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Over 2,500 Funds, Investment Trusts, Bonds, ETF's or Cash. Capital at risk.
  • Invest From: £100 single or £25 per month

Lifetime ISA

from AJ Bell

Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Over 2,000 Funds, Shares and ETF's. Capital at risk.
  • Invest From: £25 per month

Lifetime ISA

from Nutmeg

  • Protection Scheme: FSCS
  • Fund Choice: A range of portfolios for your Lifetime ISA suited to your chosen risk level and investment style. Capital at risk.
  • Invest From: From £100 to £4,000.

Please be aware we are not currently able to offer any Lifetime ISAs from Lloyds.

Who are Lloyds?

Lloyds are one of the UK’s top four biggest banks. The company’s history dates as far back as Taylors and Lloyds, founded in 1765, and they have an extensive history and reputation in the banking world.

Lloyds offer a wide range of financial services for individuals, businesses, charities and other bodies.

They offer various ISA accounts for private investors. However, at the time of writing, Lloyds do not currently offer a Lifetime ISA product.

What is a Lifetime ISA?

A Lifetime ISA (LISA) is an investment account designed for individuals saving for a deposit towards their first home.

HMRC adds 25% to all your contributions for free. You keep this 25% provided that you use your LISA for one of the two specified purposes.

If you don’t use your Lifetime ISA for your first home purchase, they can also be used for retirement savings after the age of 60 to complement your pension.

You can contribute up to £4,000 to a Lifetime ISA in the current tax year, which means you’re eligible for £1,000 free from HMRC each year.

What are the advantages of a Lifetime ISA?

Here’s a list of the main features of Lifetime ISAs so you can understand if they’re the right product for you:

  • 25% Government bonus added to your contributions
  • LISAs are free from capital gains tax
  • LISAs are free from income tax on dividends and interest
  • Investment flexibility - choose a Cash LISA or a Stocks and Shares LISA

What are the disadvantages of a Lifetime ISA?

The main negative of a Lifetime ISA is the charge applied to unsolicited withdrawals.

These are withdrawals that are not for the deposit of a first house and are before the age of 60.

You are charged 25% of your withdrawal which means this will be a greater amount than the 25% bonus you originally receive.

For example:

If you add £2,000 to a LISA, HMRC will add 25% taking you up to £2,500. However, withdrawing the full £2,500 then incurs a 25% charge on that figure, which is £625. This is deducted from your withdrawal, leaving you with only £1,875 which is less than you originally put in.

To avoid this charge, you must make sure your property fits within the LISA rules below, or you’ll need to wait until age 60 to withdraw your funds.

What houses are eligible to buy with a Lifetime ISA?

Before investing in a Lifetime ISA, it's important to know the rules about what property you can buy to make sure your LISA funds are applicable. Here are the key factors to consider:

  • You must be a first-time buyer
  • You must be buying via a mortgage – you cannot use your Lifetime ISA as a cash buyer
  • You must have held your LISA for at least 12 months
  • Restricted to a maximum property value of £450,000
  • Lifetime ISA funds cannot be used for buy-to-let properties

If your property purchase doesn’t fit within the above criteria, you won’t be able to use your Lifetime ISA funds for your deposit.

This means you’ll have to wait until age 60 before you can withdraw your LISA funds without paying the 25% charge.

Can I transfer my normal ISA into a Lifetime ISA?

If you have a standard Cash or Stocks and Shares ISA and want to get the benefits of a Lifetime ISA, you can transfer them into a LISA by completing an ISA transfer form with your LISA provider.

You will get the 25% HMRC bonus on any ISA funds you transfer into your Lifetime ISA; however, you can only transfer up to £4,000 per year as this is the annual LISA allowance.

If you have more than £4,000 worth of normal ISAs you want to transfer, you’ll need to transfer £4,000 per tax year until all your ISA funds are moved across.

Which Lifetime ISA is best?

The best Lifetime ISA for you depends on several factors – here's a list of the most important things to consider when you are comparing Lifetime ISA providers:

  • Do you want to invest in Cash or Stocks and Shares?
  • For Cash LISAs, what are the interest rates on offer?
  • For Stocks and Shares LISAs, what investment options are available?
  • How good is the LISA provider’s customer service rating?
  • What are the ongoing and ad hoc Lifetime ISA charges?

How do I apply for a Lifetime ISA?

The easiest way to open a Lifetime ISA is online. Once you have chosen a Lifetime ISA provider, go to their website and follow the instructions to create your account in minutes.

To verify your account, you’ll need to make a payment with either your debit card or via Direct Debit.

FAQs

How much can I contribute to a Lifetime ISA?

You can currently contribute up to £4,000 this tax year.

Can I have a Lifetime ISA and a standard ISA open at the same time?

Yes, if you already have a standard ISA, you can still open a LISA provided you don’t go over your combined ISA allowance of £20,000.

Can I have a joint Lifetime ISA?

No, Lifetime ISAs must be opened in an individual’s name. However, if you have a partner, they can open their own Lifetime ISA and you can put both your savings accounts towards your deposit.

Is there an age limit for Lifetime ISAs?

You must be between 18 and 39 to open a Lifetime ISA.

You can keep contributing to an existing LISA until the age of 50.

Can I transfer my Help to Buy ISA into a Lifetime ISA?

Yes, if you have an existing Help to Buy ISA you can transfer this to a Lifetime ISA.

You’ll need to complete an ISA transfer form with your new Lifetime ISA provider to get the ball rolling.

Are Lifetime ISAs tax-free?

Yes, Lifetime ISA accounts are completely free of tax.

Can I lose my money in a Lifetime ISA?

If you invest in a Stocks and Shares Lifetime ISA then your investments can fall as well as rise in value. This means you could get back less than you originally put in.

If you make unsolicited withdrawals, you could also be charged more than you have originally put in.

What happens to LISAs when you die?

Lifetime ISAs are treated as normal investments when you die, meaning that your beneficiaries will inherit them through your estate and may be liable to inheritance tax.

Can I transfer my Lifetime ISA to a normal ISA?

No, once your funds are in a Lifetime ISA you cannot transfer them out to a standard ISA. You can only transfer them to another Lifetime ISA.

Do Lloyds offer a Lifetime ISA?

Lloyds do not currently offer a Lifetime ISA product. 

Up to £1,000 bonus per year from the government

Aged between 18 and 39? The Lifetime ISA offers an exciting way to save for your first home and later life with a 25% boost from the government.

Download our factsheet now to find out more, including:

  1. How much you can invest each year
  2. The penalties to watch out for when you access your money
  3. Where you can invest (cash, stocks and shares)
  4. The options for savers who already hold a Help to Buy ISA

FREE Lifetime ISA Explained - Factsheet from Hargreaves Lansdown »

Important Risk Information:

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website aims to provide information to help you make your own informed decisions. It does not provide personal advice based on your circumstances. If you are unsure of how suitable an investment is for you, please seek personal advice.

Lifetime ISAs

Save for your first home and retirement

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Junior ISAs

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Stocks & Shares ISAs

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Latest News

5 Considerations for Your Next Investment ISA

15th March 2021

You've decided to invest your savings into a Stocks and Shares ISA. You'll be using your tax-free ISA allowance for this year before the deadline, while also investing your money for your future. But what do you need to consider before opening an account? We've put together a list of our top five considerations for you to think about before you click "apply". 

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