Sarah Laing looks at the benefits of opening a lifetime ISA and flags up an important recent change.
Qualifying individuals are eligible to open a lifetime individual savings account (LISA) in the same way as opening a regular ISA and contribute up to £4,000 each year, with the government providing a 25% bonus on contributions at the end of each tax year up to the age of 50.
Lifetime ISAs are a tax-efficient savings vehicle as there will be no income tax to pay on interest earned and no capital gains tax to pay on subsequent profits arising on the money invested.
Who is eligible?
A ‘qualifying individual’ is generally an individual who:
- is 18 years old or more;
- is under 50 years old (individuals between 18 and 40 may open accounts, but investments may be made up to age 50);
- has not made