Wealth Management

Lifetime ISA (Lisa)

A new tax-favoured savings scheme was announced in the Chancellor’s 2016 budget. It became available in April 2017, but is not offered by all investment providers.

Lisa’s are meant to be a new way of saving for retirement or house purchase, so there are restrictions on when savings can be withdrawn.

The overlap between Lisa’s and personal pensions is a suitability ‘grey area’. Savers need professional advice on which is the better product for their particular saving and retirement needs and preferences, in whether to blend both solutions.

‘Under-forties’ will be allowed to save up to £4,000 per year in a Lisa. Interest is tax-free and, for every £4 saved, HM Treasury will add a further £1. (This is virtually the same as basic rate tax relief on savings.)

Investors aged between 18 and 40 years can now invest up to £4,000 of their annual ISA allowance in a Lisa. Investment can be topped up each year up to age 50.