Aged between 18 and 39? Want to save up to buy your first home or supplement your pension in later life? A Lifetime ISA could be just what you’re looking for! Donna Robertson, an independent financial advisor here at Jones & Co discusses the benefits.
“Lifetime ISAs were launched by the Government last year but there wasn’t much publicity surrounding their launch so not many people know about them. They represent an ideal opportunity for lots of people to save money and get a return on those savings, you just need to be aged between 18 and 39 to take advantage.
“Every UK citizen has an annual £20,000 tax-free savings allowance. Within the Lifetime ISA, you can use up to £4,000 of this allowance and choose to pay in a set affordable monthly amount or a lump sum, it’s completely flexible to suit your own financial circumstances. You could also transfer an amount from an existing ISA if you wanted to do so.
“There are two different types of Lifetime ISAs, a stocks & shares version and a cash version. The cash option will pay the typical bank rate of a cash ISA – anywhere between 0.5 and 0.75%. A stocks & shares option, however, will be based on stock market performance and could pay more interest depending on your approach to risk.
“Both types of Lifetime ISA offer the benefit of the Government adding a whopping 25% bonus to your savings up to a maximum of £1,000 per year! This money will become available to you if you are buying your first home, are aged 60 or over or have been diagnosed with a terminal illness.
“Once you’ve opened your Lifetime ISA you can pay into it until you reach 50 years of age. After that, you can no longer pay into it or get the 25% bonus but your account will remain open and earn interest or returns on your investment if you chose a stocks & shares ISA. Once you reach 60 you can access your money, tax free, with no charges and spend it on whatever you wish.
“I’d urge anyone within the eligible age requirement for Lifetime ISAs to open one and take advantage as soon as possible. Even if you just pay £25 per month into the ISA, the 25% annual bonus will soon add up and could really help you purchase your dream home or fund that round-the-world trip when you reach 60!”
To find out more about Lifetime ISAs or wealth management, you can arrange a free consultation with Donna. Simply call 01246 550521 or email: firstname.lastname@example.org and we’ll do the rest.