In the 2016 Budget, the Chancellor announced the introduction of a Lifetime ISA.
This will be available from April 2017 to any adult under 40 and will enable people to save up to £4,000 each year. Investors will receive a 25% bonus from the government on every pound they put in, until the age of 50, and the LISA can be used towards buying a first home or as retirement income without a withdrawal penalty.
People who save the maximum each year will receive an annual bonus of £1,000 from the government and savers will be able to make Lifetime ISA contributions and receive a bonus from the age of 18 up to the age of 50.
It is hoped that the Lifetime ISA will help young people save flexibly for the long-term throughout their lives. It will help them to simultaneously save for a first home and for their retirement, without having to choose one over the other. The Lifetime ISA is designed to work with existing ISA products and will be simple for savers to use, with investment growth on savings and future withdrawals being tax-free.
Further information can be found here.
For further advice, please contact Deborah Trelease or your usual Wealth Management contact.