What is the lifetime ISA and how does it work? ISA advice from Martin Lewis – WBNews

The lifetime ISA will be available from April 2017 The new type of savings account, announced in the 2016 Budget, is designed to allow greater flexibility for young savers. Here is a summary of how the lifetime ISA works and who will be able to open an account. What is a lifetime ISA? The savings account is designed to let young people save for their first home or retirement without paying tax on the interest they earn. Savers will also receive a government bonus of 25% on any savings put into their account. For every £4 that savers put in, the government will give them £1. The lifetime ISA will be brought in from the start of the new tax year on April 6 2017. George Osborne announced the lifetime ISA in the 2016 BudgetWho can open a lifetime ISA? Anyone between the ages of 18 and 40 will be able to open a lifetime ISA account. The 25% government bonus will apply to any savings put into the account before the accountholder turns 50. The savings and the bonus can be put towards a deposit on a first home worth up to £450,000 anywhere in the country. After their 60th birthday, savers can take out all their savings tax-free. In order to take out the money before the age of 60, they must pay a 5% charge and give up the government bonus, plus any interest growth on it. How much can you save? The lifetime ISA allows people…more detail