The Metfriendly Lifetime ISA (LISA) is designed to do one of two things – help you buy your first home, or supplement your retirement pot.
You can save up to £4,000 a year tax-free to which the government will add an impressive 25% (that’s up to £1,000 p.a.!) and Metfriendly also adds annual bonuses and a final bonus.
It’s important to remember however, that although the government bonus is added as you save, you will only actually keep it if you are a first time home buyer and use your LISA savings on a ‘qualifying property purchase’ (see FAQs) or don’t withdraw any of your savings until you are 60.
Lifetime ISA Key Benefits
- the government will add 25% on top of your savings – that’s up to £1,000 each year!
- Metfriendly will add an additional guaranteed annual bonus (1.5% until April 2021 for amounts invested in 2020/21 tax year). After that, annual bonuses are as per our Lump Sum ISA, including a possible final bonus after you invest for a further 3 complete tax years
- save monthly (min £100 p.m.) or add lump sums (min £1,200 or £400 for top-ups)
- you can invest a maximum of £4,000 per year (leaving you £16,000 a year to invest in other Metfriendly ISAs)
- available to those aged 18-39, but once you’ve opened an account you’ll be able to continue to pay in contributions up to the age of 50
- no income or capital gains tax is payable on the investment growth
- your spouse is eligible too which means you could get up to £2,000 a year EXTRA from the government between you
- you can transfer money in from other ISAs too (see FAQs)
Please note, if you seek to withdraw funds from a Lifetime ISA for anything other than a qualifying house purchase (or before the age of 60, if you’re saving towards retirement) significant government penalties apply, and you may get less back than you have put in.
As of 1 May 2020, People whose income has been affected by Coronavirus and who want to access their Lifetime ISA funds early will no longer face an additional withdrawal charge, thanks to a temporary rule change. If you think this applies to you please contact Member Services by phone on 01689 891 454 to discuss your personal situation. HM Treasury will legislate for a temporary reduction in the LISA withdrawal charge to 20% between 6 March 2020 and 5 April 2021 (inclusive). This will mean account holders will only have to pay back any government bonus they have received, and not the full 25% charge. The rule change will be backdated to 6 March, so anyone who has made an early withdrawal from their LISA since that date and paid the 25% withdrawal charge will have the difference refunded – we will be contacting all those affected during the next few weeks.
Metfriendly reserves the right to also apply a Market Value Reduction (MVR) so that the value when you cash in more fairly reflects our performance over the period of investment.