You can use the individual savings account Lifetime ISA to buy your first home or start saving money for later years of life. To open an account, you must be 18 years old or older, but less than 40 years old.
Up to when you are 50 years old, you can transfer to an account up to £4000 a year. The government will add to your savings a bonus of 25%, up to a maximum of £1,000 per year.
Limit Lifetime ISA at £4,000 goes to your annual limit of individual savings account. For the 2017 -2018 tax year this amount is £20 thousand.
On the Lifetime ISA account, you can have money or shares (or both).
When withdrawing funds from the account, a 25% commission is charged. It does not apply if:
you buy your first home;
you are 60 or more years old;
you are terminally ill, and you have less than 12 months to live.
When you turn 50, you cannot make payments to Lifetime ISA or get a 25% bonus. At the same time, your account will remain open, and your deposits will continue to bring you interest.
To open and continue to put money on the Lifetime ISA, you must live in the UK, unless you are a civil servant (for example, in the diplomatic service) or a spouse or civil partner of a person in public service.
Buying the first house
You can spend your savings on the purchase of your first housing if all the following items apply to you:
The property costs £450,000 or less;
you acquire real estate, at least 12 years, after you opened a Lifetime ISA account;
you use the services of a lawyer who is in charge of the transfer of property. In this case, the provider of your individual savings account will pay the money directly to the person;
you are making a purchase on a mortgage.
Buying a house together with someone
If you buy property together with a person who has a Lifetime ISA, he can use both his savings and the bonus.
If you have Lifetime ISA and Help to Buy ISA, when purchasing your first house you can use a government bonus only from one of them.
You can transfer money from the Help to Buy ISA account to the Lifetime ISA. If you transfer money from Lifetime ISA to Help to Buy ISA, you will have to pay a 25% commission.
Savings on pension
When you turn 60 or more, you will be able to use the money saved at the Lifetime ISA. If you withdraw money or transfer it to another ISA account before you turn 60, you will pay a 25% commission.