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Lifetime ISA

Helping people aged 18-39 buy their first home or build an additional retirement nest egg

Lifetime ISA

Helping people aged 18-39 buy their first home or build an additional retirement nest egg

The Metfriendly Lifetime ISA (LISA) is designed to help you buy your first home and 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 (wishing to buy a property in the UK worth up to £450,000) and use your LISA savings on a ‘qualifying property purchase’ (see FAQs) or saving towards your retirement and don’t withdraw those 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 2025 for amounts invested in 2024/25 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
  • comes with the Metfriendly Escalator option which could help you reach your saving ambitions faster
  • save monthly (min £50 p.m. when using the Metfriendly Escalator option, or £100 without) 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)
  • you can use your Lifetime ISA to help buy your first home and, by keeping it open and continuing  to contribute, use it to supplement your retirement too, with all contributions up to the age of 50 being eligible for a 25% government bonus

Reach your saving ambitions faster

The Lifetime ISA comes with the Metfriendly Escalator option.

  • If you select this option, your monthly payments can start from just £50 in the first year and will then automatically increase each year (minimum increase of £10 a year) from the following April, until you tell us to stop.
  • The most you can contribute is £333 per month, the equivalent to the maximum monthly ISA limit of £4,000 over 12 months.

If you already have a Metfriendly Lifetime ISA, you can add the Metfriendly Escalator by completing this short form.

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.

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.

Metfriendly's Lifetime ISA

What returns might I expect from this plan?

A 1.5% annual bonus rate applies only for amounts invested in 2024/25.

The annual bonus rate (and final bonus rate) applying to amounts remaining invested after the guarantee period will be the same as the bonus rates for our Lump Sum ISA which you can view here.

You can also see the past performance of our Lump Sum ISA here.

What happens if I surrender my LISA for something other than property or before I am 60?

Firstly, remember that if you surrender your LISA before your 60th birthday and DO NOT use the funds for a qualifying property purchase, there will be a 25% HMRC charge on the amount surrendered. This will not only claim back the government bonus but will also apply a penalty to the remaining amount.

In addition, Metfriendly may make the following charge:

Withdrawal in the same tax year as the investment

Our charge will be 5%.

Withdrawal in the tax year following investment 

Our charge will be 3%.

Withdrawal in later tax years

There will be no charges by Metfriendly.

Are there redemption charges if I cash in my LISA for a qualifying property purchase or after I turn 60?

Accessing your Lifetime ISA for a property purchase or after you turn 60

Assuming that the withdrawal is for a qualifying property purchase (same principle if withdrawing aged 60+), there will be a 2% redemption charge on any funds withdrawn during the tax year that they were invested.

Any funds paid in during previous tax years will not be subject to any redemption charge when they are withdrawn (providing it is for a qualifying property purchase)


Joe opened a Lifetime ISA in Aug 2017 and has invested the following:

Tax Year 1 (6 Apr 17 – 5 Apr 18 Tax Year 2 (6 Apr 18 – 5 Apr 19) Tax Year 3 (6 Apr 19 – 5 Apr 20
Aug 17 – Opened Lifetime ISA Lump Sum £4,000 6 Apr 18 – Lump sum of £4,000 contributed to Lifetime ISA 6 Apr 19 – Lump sum of £4,000 contributed to Lifetime ISA

In June 2019, Joe finds his dream property and is ready to buy his first house. He would like to withdraw the funds for a qualifying property purchase. Because Joe has made contributions into the LISA in the same tax year he is withdrawing for a qualifying property purchase, a small charge of 2% on the current tax year of investment will be applied.

Based on the figures above this would be:

Tax Year 1 – £4,000 invested (plus £1,000 gov. bonus) – 0% redemption charge

Tax Year 2 – £4,000 invested (plus £1,000 gov. bonus) – 0% redemption charge

Tax Year 3 – £4,000 invested (plus £1,000 gov. bonus) – 2% redemption charge (£100 redemption charge)

Total amount invested by Joe – £12,000

25% government bonus – £3,000

Total Invested – £15,000

2% redemption charge (only applied to money contributed in tax year 3) – £100

Total Funds available for first property purchase – £14,900 (plus Metfriendly Annual bonus)

What is a 'qualifying property purchase'?

To avoid the 25% government charge on your LISA withdrawals they must be used for a ‘qualifying property purchase‘.

The main conditions are:

  • that you have never owned a property before
  • the value of the property (which must be in UK) can only be up to £450,000
  • if you are buying under a shared-ownership scheme, the price cap applies to the total sale price, not just your share
  • it must be for the first-time-buyer to live in as their only residence and not buy-to-let
  • the conveyancing must be carried out by an eligible conveyancer
  • the withdrawal of funds for the purchase must be at least 12 months after the first subscription to each lifetime ISA, including funds transferred from a Help to Buy ISA

NB. You may buy a property jointly with a partner, however they will only be able to use LISA savings if it is also their first house purchase.

Where is my premium invested?

The premiums are invested in the Metfriendly With-Profits fund. For information on what that is and how it works, including a diagram to show the approximate investment mix, please refer to the With-Profits fund page.

What are the rules on ISA transfers into my Lifetime ISA?

In general, you can transfer money from different types of ISAs to your Lifetime ISA, however the rules vary depending on the type.

Other ISAs

You can transfer any amount up to £4,000 from any other “Cash” or “Stocks and Shares” or “Innovative Finance” ISA into a LISA. Any amount transferred will count against the LISA limit and will receive the Government bonus. Current year subscriptions transferred-in will continue to count against the overall annual ISA limit, but previous year subscriptions will not.

Only £4,000 can be transferred (or lesser amount if you have already made current year contributions into the LISA) and will attract the full Government bonus unless the transfer is from another LISA. Therefore if you want to transfer more than £4,000 from another ISA and receive the government bonus on the full amount, it would be necessary to transfer the extra amount(s) in subsequent tax year(s) until you have transferred the total value.

Other Lifetime ISAs

You can transfer any amount without upper limit between LISAs. In respect of current year contributions, the Government bonus will be applied either by the original LISA manager or by the new one (not both!). The amount of your current year LISA contributions continues to apply against your LISA limit and your overall ISA limit.

Help To Buy ISAs

You can transfer up to £4,000 from a ‘Help to Buy’ Cash ISA into a LISA. Investors who are eligible to open a Lifetime ISA may make a transfer of funds from the Help to Buy ISA into a Lifetime ISA, this amount counting towards the Lifetime ISA payment limit, and the government bonus will be added on top.

Table showing treatment of different types of subscriptions and payments into a Lifetime ISA (LISA)

The table below sets out all the rules, but should you have any questions about transferring don’t hesitate to call our office on 01689 891454.

Type of subscription / payment / transfer
Does it count towards annual ISA subscription limit if paid to LISA? Does it count towards LISA payment limit (is it a current year payment)? Can it earn a Government bonus (is it a qualifying addition)? Is payment disregarded for the ‘one LISA per tax year’ rule?
Transfer of previous year ISA cash or investments from non-LISA No Yes Yes No
Transfer of current year ISA cash or investments from non-LISA Yes (when initially subscribed to non-LISA) Yes (on transfer) Yes No
Funds transferred to LISA from Help to Buy ISA No Yes Yes No

To make a transfer, you will need to be complete our Transfer Application Form (PDF).

What if I change my mind or decide to cancel?
  • You can cancel for a full refund within 30 days of receiving your policy documents.  Simply contact our Member Services team on 01689 891454 or email [email protected]
  • If you wish to change your contributions, add the Metfriendly Escalator or withdraw funds, our friendly Member Services team will be able to discuss your options.
How much will it cost for advice?
  • We do not offer or give financial advice.
  • We do not make any form of commission or incentive payments.
  • The cost of providing verbal or written information about this product is included in our overall expenses.
How do I contact you?

Metfriendly, Central Court, Knoll Rise, Orpington, BR6 0JA

Phone: 01689 891454

Email: [email protected]