Lifetime ISA explained: Is it worth it?

The Lifetime ISA, or LISA, will give savers and investors a 25% bonus on deposits, giving up to £1,000 in free cash each year.

Sounds good right? Too good to be true? There must be a catch right? Well, yes. But as long as you use the cash towards buying your first home or for retirement a Lifetime ISA can be a better option than alternatives.

In this video I've shared what a Lifetime ISA is and how it works, who can get one and the restrictions on use - such as a 25% penalty to take the cash out for any other reason.

Plus I've compared them to Help to Buy ISAs and Pensions to help you decide if they're right for you.

W A T C H N E X T

- ISAS EXPLAINED

- SHOULD YOU OVERPAY YOUR MORTGAGE?

- THE BEST SAVINGS ACCOUNTS

#LifetimeISA #LISAvsPension #HelpToBuyISA

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(You'll also get a free Quidco bonus for signing up)

A B O U T A N D Y

DISCLAIMER
Content in these videos does not constitute regulated financial advice. Any offers mentioned were correct at the time of filming.

[tomodwyer]

Brilliant explanaition, thanks Andy. Needed it just before I started a research project!

[stephcoathupe]

This was SO helpful, thanks so much for spelling it all out!

[kiank]

Thanks for the great video as always. The channel is growing fast. Keep it up

[minaikegima]

Thank you so much for this video. It answered all my questions that I have been wanting to ask and explained in such simple terms for anyone to understand

[jaks]

I’ve been contemplating to open a LISA, Great video

[grottonisred]

This is brilliant...just the facts and easily understandable....

[danielleirvine]

Great video really well explained!! Any advice for someone who wants to build there 1st home? I already have a first to buy isa but I've now decided to build.

[sonyh]

great video Andy, thank you very much I wish I knew this before because I just turn 40y

[LookingAfterYourPennies]

Another fab video Andy! I’m a big fan of LISAs.

[rowenako]

Very helpful video, thank you very much for clarifying a lot of confusions. Is there any restrictions on what kind of property can be used with this lifetime ISA? I understand that when buying a house, you can get different mortgage deals, is there any restrictions about mortgage package from different lifetime ISA providers?

[jonathanrichmond]

Other reasons to invest in to a Liftime ISA is if you are already contributing the full annual allowance to your pension or if you are at risk of breaching the pension lifetime allowance. It can also be part of an early retirement strategy to supplement income until you can draw your state pension.

[ally]

Really good video, some timeline breaks would have been useful for each section. Great content though 👍

[paul]

Great video!!! I was going to plow £20k into a stocks and shares ISA next year but now I will definitely be putting £4k in a LISA then probably invest in something very safe like S&P 500 then forget about it until I’m 60! Thanks so much for this info!! Just wish the allowance would go up!

[saranyamani]

Thank you! This is very informative.
Will there be any conflict if My partner and I open different LISA for one property we gonna buy.
I mean like, is there any one to one rule between LISA and the property?

[AaliyahRash]

No doubts, A good way of growing and saving your money is through investing . You don't need to have much before you can invest. "That little money you have now can make you millions if you invest it wisely". I wasnt financial free until my 40’s and I’m still in my 40’s, bought my second house already, earn on a monthly through passive income and got 4 out of 5 goals, just hope it encourages someone that it doesn’t matter if you don’t have any of them right now, you can start TODAY regardless your age INVEST and change your future! Investing is a grand choice I made

[YakobtoshiNakamoto]

I've just opened a LISA. Looking to buy my first home in the next 2/3 years so seems like a no brainer!

[SebbySells]

Great video! Quick question though can you use the first time buyers option if you have inherited a house? I would assume so as the inherited house wasn't purchased correct?

[jagtarsandhu]

Thank you for the video.
question : is that I am joint owner of a property. I am no longer a first time buyer.. is thos correct.

Thank you for the upload. Very informative.

[viamedia]

I should add that getting a Lifetime ISA might be a pretty bad idea if you're thinking of moving abroad down the line. While technically you can keep your Lifetime ISA (just like any ISA) while living abroad provided you don't contribute to it during your absence from the UK, it seems that most Lifetime ISA providers actually opt to close and liquidate your LISA if you stop being a UK resident. (I suspect they just want to save themselves performing the due diligence that you're paying any taxes you owe abroad etc.) This will obviously count as unauthorised withdrawal from your account so you'll get hit by that sweet 25% penalty - and that just because you decided to move to Spain or sth.

Also, down the line it's not unthinkable that the Treasury might decide to impose some withdrawal charge on the LISA balance if you decide to retire abroad, even if you're following all the rules and only accessing it after the age of 60. After all that 25% bonus came from UK taxpayers money so the Treasury might not be comfortable with it leaking into some other economy.

[HugglesVlogs]

Hi! Thanks for this video. I'm thinking of opening a Lisa account. Any thoughts about doing it with unity mutual?