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NatWest 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 NatWest.

Who are NatWest?

NatWest are a major UK high-street bank who are majority-owned by the UK government.

They offer a range of financial services for personal and company lending and banking, including ISA accounts for individual savers.

NatWest offer a range of ISA accounts, but they do not currently offer a Lifetime ISA (LISA) product.

What is a Lifetime ISA?

Lifetime ISAs are a type of savings account that benefit from a 25% bonus from HMRC on top of all your contributions.

For every £4 you put in, the government adds £1.

The maximum you can contribute per tax year is currently £4,000, meaning you're eligible for a free £1,000 every year if you use your full LISA allowance.

If you buy a home with a partner, you can both utilise your own LISA allowances, meaning you can each quality for the £1,000 bonus and put your LISA savings together.

However, you must use your Lifetime ISA funds for either:

A) a deposit on a first home purchase

B) at age 60 or over

If you withdraw your LISA funds for any other purpose, you are charged 25% of your withdrawal value which could be more than the original bonus you receive.

What are the benefits of Lifetime ISAs?

The main advantage of a Lifetime ISA is the government bonus of 25%. This is an incentive from HMRC for individuals to save towards purchasing their first home.

If you’re set on buying your first home, LISAs are hard to beat as savings accounts for this purpose.

However, there are other advantages of Lifetime ISAs that you should also be aware of:

  1. Free from income tax
  2. Free from capital gains tax
  3. Invest in cash products to guarantee your investment won’t lose value
  4. Invest in stocks and shares for greater potential returns

What are the drawbacks of Lifetime ISAs?

The main drawback of Lifetime ISAs is the charges incurred if you don’t end up using your funds for a first house purchase or at age 60.

For unsolicited LISA withdrawals, you are charged 25% of the withdrawal value.

Because you’re charged 25% of the withdrawal value, this can be more than you originally put in.

For example, if you invest £2,000, HMRC tops this up to £2,500. If you then take out the full £2,500 as an unsolicited withdrawal, you’ll be charged 25% of £2,500 which comes to £625, meaning you only get back £1,875.

What type of home can I buy with a Lifetime ISA?

There are several limitations on what kind of house you can buy with your Lifetime ISA funds.

It’s worth knowing these before you invest because if you can’t use your LISA funds for your property purchase, you’ll have to either wait until age 60 or face the 25% charge.

  • Must be your first property purchase
  • Must be buying with a mortgage – LISAs are not applicable for cash buyers
  • Limited to a maximum property value of £450,000
  • You cannot use your LISA for a buy-to-let property

Can I transfer my normal ISA into a Lifetime ISA?

Yes, you can transfer your existing ISA accounts into a Lifetime ISA, but only up to £4,000 in the current tax year.

If your current ISA is over £4,000, you’ll need to transfer it partially across multiple tax years to get it all in.

You’ll also benefit from the 25% bonus on the value of your ISA transfers into your Lifetime ISA.

Which is the best Lifetime ISA?

Choosing a Lifetime ISA provider can be tricky, and the right one for you might not be the best for somebody else.

However, here’s what we think are the most important factors to consider when comparing Lifetime ISA providers:

  • What investment options are available (e.g., cash or stocks and shares)?
  • If choosing a Cash LISA, what interest rates are on offer?
  • If choosing a Stocks and Shares LISA, what investment products do they offer?
  • What are the LISA annual management charges?
  • How good are their reviews?

How do I open a Lifetime ISA?

You can open a Lifetime ISA:

  • Online
  • Via your provider’s mobile LISA app
  • Over the telephone
  • With a postal application

You need to add money to officially open your account, so you’ll need to pay in via debit card or set up a Direct Debit.

FAQs

What is the annual Lifetime ISA allowance?

The current Lifetime ISA allowance is £4,000 per individual.

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

Yes, if you already have a standard ISA, you can still open a LISA.

Can I contribute to a LISA if I have already used my full ISA allowance?

Your LISA and standard ISA allowances are linked, and you can only contribute a total of £20,000 across both products. If you’ve already added £20,000 to a normal ISA, you can’t contribute to a Lifetime ISA until the next tax year.

What is the age limit for a Lifetime ISA?

You have to be between 18 and 39 to open a Lifetime ISA, but you can keep adding money to an existing LISA until you are 50.

Can my relatives contribute to my Lifetime ISA?

No. Only you can add money to your LISA.

Are Lifetime ISAs tax-efficient?

Yes, LISA investments are completely free from tax.

Can I lose money through a Lifetime ISA?

If your Lifetime ISA invests in stocks and shares you could lose money, as your investments will fall as well as rise in value.

What happens to a LISA when you die?

Upon death, a LISA falls to the individual's estate and becomes liable to Inheritance Tax for the beneficiaries.

Can I transfer a Lifetime ISA to a standard ISA?

No.

Do NatWest offer a Lifetime ISA?

NatWest do not currently provide a Lifetime ISA. 

Sam Hodgson
Edited by Sam Hodgson - ISA.co.uk

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

Compare Lifetime ISAs

Junior ISAs

Invest for your child’s future

Compare Junior ISAs: 

Stocks & Shares ISAs

Invest tax-free in stocks and shares 

Compare Stocks and Shares ISAs:

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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