What is the new Lifetime ISA announced today in the Budget?
If you were paying attention to George Osborne’s Budget today then I’m sure a few things wouldn’t have come as a shock to you, however there are a few key points that nobody could have predicted!
One of these being the new lifetime ISA which will be available in April 2017.
Basically the new savings account has been introduced so that we will no longer have to choose between saving for our retirement and saving for a home.
It will be available to anyone between the ages of 18 and 40 and if you save £4,00 a year then the Government will give you a bonus of £1,000. There is no maximum monthly contribution required but you can save up to £20,000 a year. This is per person so couples can double the amount.
Your savings can be taken out after your 60th birthday and can be taken out tax-free. The money can either be used to go towards buying a home or on your retirement.
This is significantly better than current pension arrangements and should act as an incentive for young people to save.
If you take the money out before your 60th birthday then you will lose the government bonus.