Lifetime ISA – the facts
The new Lifetime ISA was announced by Chancellor George Osborne in the 2016 Budget ... so what is it and when is it available?
What is it?
- You can save up to £4,000 a year, either as a lump sum or by putting in cash when you can.
- At the end of the tax year the Government will add a 25% bonus on top. So, if you save £1,000 you'll have £1,250 and if you save the full £4,000 you'll have £5,000.
- The bonus is paid until you reach age 50 & paid annually at the end of each tax year.
- The maximum bonus is £32,000 (unless the rules change).
When is it available?
- Lifetime ISAs launch on 6 April 2017, and you must be aged 18 or over (but under 40) when you open one.
- If you reach 40 on or before 6 April 2017 you won't be eligible for a Lifetime ISA – so the earliest you could be born to be eligible is 7 April 1977.
- The money saved is to be used either towards a first home that must be worth under £450,000 or, once you're over 60, towards retirement.
This is a totally new way to save and, as such, all the detailed information isn’t available yet and even what has been released is subject to consultation. Many elements could change so please treat this information as a general guide only.
For further information please contact Steve Clements at Ascot Lloyd.
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