Our Lifetime ISA is an Individual Savings Account that gives you a 25% Government bonus on payments into the account each month, up to a maximum balance of £4,000 annually and you don’t pay tax on your interest.
The Lifetime ISA is only suitable for savers planning to buy their first home or who are saving for later life as there are penalties for withdrawing it for any other reason, unless you’re diagnosed with a terminal illness. It is a Government initiative to support first time buyers on to the property ladder and also to help you save towards your retirement.
Before applying for a Lifetime ISA please read the
key features document and key product information including terms and conditions for our online account and in-branch account.
Below we aim to answer all the burning questions you might have about Lifetime ISAs.
A Lifetime ISA is a type of ISA (an Individual Savings Account) for first-time buyers or those looking to save for later life. A maximum of £4,000 can be deposited each tax year, and the Government will award a bonus of 25% annually (up to a limit of £1,000 each year).
To qualify for a Lifetime ISA, you must be a UK resident aged 18 to 39. However, once your ISA has been opened you can continue to add money until your 50th birthday.
If you're thinking about saving up for your very first home, a Lifetime ISA can give you a helping hand.
A Lifetime ISA is certainly worth considering if:
- You're saving for your first house, but have no plans to buy in the next 12 months
- You'd like to boost your retirement fund and save for post-60 life
A first-time buyer is someone who has never owned a property before, including a home outside of the UK. If you've inherited a property, or owned a share of one, you will not be classed as a first-time buyer.
If easy access to your savings is important, a Lifetime ISA will not be suitable for you. You'll be charged 25% to withdraw money for reasons other than buying your first home, unless you're aged 60 or over.
To put things into context, withdrawing £2,000 will incur a penalty of £500. You will get back less than you put in if you request an ineligible withdrawal.
If you need the option to withdraw your money regularly, you should consider one of our easy access or short-term savings accounts instead.
We recommend reading our key features document and key product information including terms and conditions for our online account and in-branch account before applying. You can continue to read the answers to our Lifetime ISA FAQs below too, or get in touch with a member of our team - they'll be happy to help.
Applying for a Lifetime ISA
Yes, you can have multiple Lifetime ISAs. However, you can only pay into one account during the same financial year (April 6 - April 5).
Yes, you can. Even if you have a Cash ISA, you can apply for a Lifetime ISA. Combined, however, you cannot deposit more than £20,000 into your various ISA accounts per tax year (this is called your annual ISA allowance).
When you place money into a Lifetime ISA, it's treated in the same way as money deposited into any other ISA account. This means when it comes to means-tested benefits, your Lifetime ISA savings will be taken into consideration and you may not qualify for certain benefits.
Your Lifetime ISA will also be classed as an asset and may be taken during the debt recovery process.
Applying for a Lifetime ISA with us is simple, just give your local branch a call and we'll arrange an appointment. Bring your ID, National Insurance number and an initial cash deposit (£10 minimum).
Yes, you can apply online. You'll need your NI number, an email address and mobile phone number, proof of address for the last 6 months and your nominated bank account details.
Saving with a Lifetime ISA
We can only accept Lifetime ISA transfers into new Nottingham Building Society Lifetime ISAs, if you already have a Lifetime ISA with us, we are unable to accept your Lifetime ISA transfer in request. You must be aged between 18-39 years old prior to completing your Lifetime ISA transfer in request to us. Lifetime ISA transfers in are only permitted for our online Lifetime ISAs only, you cannot complete a Lifetime ISA transfer in request via our branches.
We only accept transfers in from a single Lifetime ISA provider (multiple Lifetime ISA transfers in are not permitted). When transferring your Lifetime ISA to us, we only accept all of your Lifetime ISA funds from your existing Lifetime ISA provider, partial transfers are not permitted.
Your current Lifetime provider is obliged, under HMRC (HM Revenue and Customs) guidelines, to complete the transfer within 30 days of receiving the request. There’s no need to tell your current Lifetime ISA provider that you are moving your money, we’ll do that for you and arrange the transfer. You will start to earn interest on the amount you transfer from the date on the transfer cheque from your current Lifetime ISA provider.
Please do not pay in any further funds into your Lifetime ISA with us until we have confirmed receipt of your Lifetime ISA funds from your existing Lifetime ISA provider.
With a Lifetime ISA, you can deposit up to £4,000 every tax year into your account. The Government will then pay you an annual bonus of 25% (capped at £1,000 per year).
On top of the 25% bonus you'll receive from the Government, your Lifetime ISA has an annual tax-free interest rate of 1.25%. This will be paid to you every year on April 5.
You can close your Lifetime ISA within 30 days of opening it without incurring a withdrawal fee. Just get in touch and we'll guide you through the next steps. This period does not apply if you are transferring your Lifetime ISA to us from your existing Lifetime ISA provider.
If you fall ill, please speak to an adviser. In cases of terminal illness, where the account owner has less than 12 months to live, withdrawals can be made without incurring a fee.
You can withdraw money penalty-free, under the following circumstances:
When you're ready to buy your first home (as long as your account has been active for 12 months. If you are transferring your Lifetime ISA to us this is the date you first funded your Lifetime ISA with your existing provider)
- When you reach 60 years old
- If you are diagnosed with a terminal illness and have less than a year to live
In the event of your death.
If you're under 60, and need to withdraw money from your Lifetime ISA for reasons other than buying a property, you will incur a fee of 25%.
Buying a home with your Lifetime ISA
Once your Lifetime ISA has been open for 12 months, you can withdraw money from it to buy your first home, worth up to £450,000.
Yes, you can. Both you and your partner can use your own Lifetime ISAs to purchase your first home together, as long as you're both first-time buyers and the property is valued below £450,000. You'll both receive the 25% bonus from the Government too as you save separately.
There's no such thing as a joint Lifetime ISA. Instead, if both you and your partner are eligible, you can open two separate Lifetime ISAs – the details of this are explained above.
Don't worry, if things don't go according to plan with your house purchase your Lifetime ISA can be re-opened and the money saved will be replaced.
Retirement and later life
A Lifetime ISA is an option people consider for their retirement savings, but it may not be the best choice. It all depends on your individual situation, and we recommend speaking to a financial adviser to discover the most beneficial route for you.
This won't affect your Lifetime ISA. It simply means you'll have access to the money from aged 60, which may be before you choose to retire.
The money in your Lifetime ISA, including all interest and bonuses, will be passed on to beneficiaries when you die.
There are a number of providers in the UK offering Lifetime ISAs but we're the only one to provide a face-to-face, in-branch service as well as online applications. Our customer satisfaction score speaks for itself, and we offer perks like a Members Rewards programme too. There's ample reason to choose a Lifetime ISA with The Nottingham, get in touch to discuss your options with our friendly team today.