Lifetime ISA (LISA) | Still Worth Getting One?
We are looking at Lifetime ISAs or LISAs and whether they are still worth it, in this continuing era of growing house prices while the LISA has yet to see any reform?
A Lifetime ISA aka a LISA, is a type of ISA account that makes up part of the larger ISA family. It was designed to help individuals save for their first home or retirement.
You have to be a UK Resident aged 18 -39 to be eligible to open up a LISA account and you can only contribute £4000 per tax year up until you turn the age of 50.
The key benefit of the LISA is that the government will add a 25% top-up bonus on any contributions you make. That means you can earn a maximum of £1000 from the government completely free every tax year.
Any money put away into the LISA is locked away and can only be accessed (without penalty) in one of two ways.
One is that you wait until the age of 60 - to help fund for your retirement.
And two put it towards the deposit of your first home, but the property value cannot be more than £450,000 in value.
Withdrawals outside of these two options will mean you will incur a 25% Penalty charge which effectively means you lose all your bonus plus some of your initial savings too. The penalty is lifted however if you are terminally ill.
You can also store your LIFETIME ISA as Cash or invest in the stock market and any interest or investment earned are tax-free.
Chapter Information (Lifetime ISA (LISA) | Still Worth Getting One?):
0:00 Introduction
0:27 What is a LISA (Lifetime ISA)?
1:42 The Problem
3:25 Is it Worth It?
🔹 ONS: www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/previousReleases?page=3
🔹 DataWrapper: datawrapper.dwcdn.net/AtxCY/1/
🔹Nutmeg: www.nutmeg.com/nutmegonomics/is-the-lisa-still-a-good-deal-for-homebuyers#:~:text=In%20London%2C%20the%20average%20deposit,a%20home%20could%20change%20significantly.
🔹 Gov.uk - www.gov.uk/government/statistics/annual-savings-statistics-2024/commentary-for-annual-savings-statistics-september-2024#lifetime-individual-savings-accounts-lisas
🔹FT: www.ftadviser.com/retirement-income/2023/06/22/lifetime-isa-withdrawal-charges-soar-53-per-cent/
DISCLAIMER: Any advice or statements perceived to be advice given in this video and any other videos on my channel are for information purposes only, and does not act as financial advice.
You are fully responsible for your financial decisions. If you are in need of any Financial Advice, please seek out a professional advisor. If you are unsure of how to do this, please feel free to reach out to me and I am more than happy to guide you.
#LISA #firsttimehomebuyer #retirement