When can I spend the money?
You can take the money out when you’re ready to buy your first home, or when you retire (as long as you’re over 60).
The LISA is a little more generous when it comes to house-buying than a help-to-buy ISA. Not only could you get back more in government bonuses, but the criteria for house-buying is broader.
For example, with your money from a LISA, you can buy a house up to the value of £450,000 (with a help-to-buy ISA, you can only put the money towards a house up to £250,000 outside of London and up to £450,000 within London). There is a catch, though – you need to have been saving for at least 12 months before you can use the money to buy a home.
If you’re buying a home with a partner or friend, then you can both open a Lifetime ISA and use both your allowances for one home.
What happens if I already have an ISA?
That’s fine – so long as you don’t go over your annual ISA allowance, you can have more than one ISA. Remember, the most you can put into a LISA is £4,000, so that still leaves you with an allowance of £16,000 to put into another ISA.
If you already have a help-to-buy ISA, you can transfer it into a new Lifetime ISA. Otherwise you’ll be able to run both products alongside each other, though you can only benefit once from the bonus towards the cost of the house.
You mentioned retirement. Is it a pension?
No – it’s a savings account, not a pension. If it helps, just think of a LISA as a nice little nest egg to boost your retirement funds. You can still pay into a personal or company pension scheme and benefit from tax relief subject to the current pension tax rules.