A Lifetime ISA (Individual Savings Account) is a UK government initiative designed to help people save for either their first home or retirement. It offers tax-free savings with a government bonus, making it an attractive option for long-term saving.
The UK government introduced the Lifetime ISA (LISA) in April 2017 to help younger people save for two major life events: buying their first home or saving for retirement. The LISA was created as part of an effort to address the challenges younger generations face in affording homes and planning for the future.
Key features include a 25% government bonus on contributions (up to £1,000 annually), with deposit limits of £4,000 per year. LISAs can be used to purchase homes worth up to £450,000 or withdrawn tax-free after age 60.