How does a Lifetime ISA work?

Account Opening:

Open a Lifetime ISA with a participating bank or financial institution.

Monthly Savings:

Contribute up to a set monthly limit into the ISA. The government provides a bonus based on a percentage of what you save.

Government Bonus:

The government boosts your savings by 25%. For every £200 you save, you receive a £50 bonus, up to a maximum bonus limit.

Saving Limit:

There’s a limit on the amount you can save in a Lifetime ISA. Once you reach this limit, you can no longer contribute, but you can keep the account open.

Home Purchase:

When you’re ready to buy your first home, the savings, including the government bonus, can be used towards the purchase.

Property Criteria:

The property you’re buying must meet certain criteria, including a price cap, and it must be your main residence.

Bonus Claim:

Your solicitor or conveyancer applies for the government bonus on your behalf when you’re closing the property purchase.

Completion:

The government bonus is paid directly to your solicitor or conveyancer at the completion of the home purchase.

Closing the ISA:

After the bonus is claimed, you can keep the ISA open for future savings or close it if you wish.