You can make an unauthorized (early) withdrawal from your Lifetime ISA (LISA) in case you are in need of your money. An early withdrawal refers to taking money out of your Lifetime ISA before the age of 60 and not for buying your first home (if your account has been open for at least 12 months) or in cases of terminal illness. These types of withdrawals will incur a 25% government withdrawal charge.
The 25% penalty is applied to the total amount you withdraw without authorization (early). This charge is designed to return the government bonus and take an additional portion from your savings. It means you will lose not only the government bonus but also part of your original savings. Here’s how it works:
If you withdraw £1,000 early, you will face a £250 penalty.
After the penalty, you will only receive £750 of the amount you withdrew.
Because the charge is applied to the full amount of the withdrawal (not just the bonus portion), it reduces the total balance more than just losing the bonus.
Steps
Step 1: Open your Lifetime ISA account in the app
Step 2: Press the Withdrawal button
Step 3: Select Another Reason
Step 4: Press Continue with withdrawal
Step 5: Select the amount you want to withdraw
Step 6: Press Continue
Step 7: Press Confirm
Please note that if you confirm the withdrawal, it cannot be undone. We report everything to HMRC and the penalty is going directly back to HMRC.
Timeframes
If you request your early withdrawal before 16:00 on a business day, you should receive the money into your Primary Pocket by the end of the same day.
If you request your early withdrawal after 16:00 on a business day or during the weekends/holidays, you should receive the money into your Primary Pocket by the end of the next business day.