Important update for the new tax year

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Take advantage of the 2020/21 ISA allowance from the safety of your home.

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Open a Lifetime ISA online today.

Important Lifetime ISA information

If you’re aged between 18 and 39 years, a Lifetime ISA (also known as LISA) could earn you up to £1,000 per year from the Government until you reach your 50th birthday. For every £4 you save, you’ll receive a £1 Government bonus - you can then use this money to put towards your first house, or your retirement.  

With the Lifetime ISA, the maximum you can save in a tax year is £4,000, meaning your Government bonus will be a maximum of £1,000 a year.

For current Lifetime ISA customers
We need to receive cleared funds by 10.30pm on Sunday 5th April for it to be included in the 2019/2020 tax year allowance. Please note some banks and building societies do not process faster payments over a weekend so we advise customers to check with the provider the funds are coming from to ensure the funds will reach us ahead of our deadline. 

For new online Lifetime ISA accounts
We recommend those wishing to open a LISA with The Nottingham this financial year attempt to do so before 5pm on Friday 3rd April. If the application is referred for any additional verification checks, the account would not be created and will not be available to fund this tax year 2019/2020. Customers will need to include all monies they wish to invest for this financial year 2019/2020 in their initial funding payment as the standard lead times of funding within 14 working days do not currently apply if these funds are to be included in your 2019/2020 allowance.



Fee free mortgage broker advice

Once you've saved at least £500 in your account for 12 months, you'll have access to fee free mortgage broker advice from Nottingham Mortgage Services, which is usually £299. We know the house buying process can be confusing but their trusted mortgage brokers will clear things up for you about by telling you much deposit you may need to save and how much you could actually borrow.

Talk to a mortgage broker on 0344 481 0076

Account details

  • 25% Government bonus

  • UK residents aged 18-39

  • Available online and in branch

  • Earn interest tax-free

  • Deposit up to £4,000 per year

  • Open with £10

  • Transfers in from a single Lifetime ISA provider are permitted (new online accounts only - aged 18-39)

Summary table

Account name

Lifetime ISA.

What is the interest rate and is it fixed?

The annual interest rate is variable and currently set at 1.25% p.a./AER*. The annual interest is tax-free.

Will I be taxed on the interest?

No. The interest you’ll receive will be paid free of UK income tax, however, the tax treatment of ISAs could change.

How do I get the bonus payments?

The Government will pay a 25% bonus on your contributions, up to a maximum of £1,000 a year.

Can I withdraw my money?

Any withdrawals within the first 12 months of your first payment into a Lifetime ISA (if you are transferring your Lifetime ISA to us this is the date you first funded your LISA with your existing provider) will incur a 25% Government withdrawal charge which mean you could get back less than you paid in. After that, you can withdraw money to buy your first home, however if you make any other withdrawals before the age of 60 the Government withdrawal charge will apply (unless you are diagnosed with a terminal illness). Find out more about this below.

How can I open a Lifetime ISA with The Nottingham?

You can open a Lifetime ISA with us online or in branch. You’ll need to have certain information to hand, find the full list below. If you are 18-39 you can transfer your Lifetime ISA funds from your existing provider via our online application process only.

What would my balance be after a year of saving?

You can use our savings table below to see how your investment will grow over time based on your savings style.

As an example, if you deposited £1,000 on account opening at the start of the tax year, your balance after 12 months would be £1,262.50. You would have earned £12.50 interest and received £250 Government bonus.

Must my first house meet any criteria to be eligible?

Yes. You need to have had your Lifetime ISA open for at least 12 months before you can withdraw money to purchase a house. If you are transferring your Lifetime ISA to us this is the date you first funded your LISA with your existing provider. House price must not exceed £450,000 to be eligible. Please read our key features document to find out more about the criteria.

Additional information

If you are employed you should consider the potential availability of a workplace pension scheme and your tax position. If you save in a Lifetime ISA instead of enrolling in, or contributing to, a pension scheme from your employer or personal pension scheme:
  • you may lose the benefit of any employer contributions to that scheme; and
  • your current or future entitlement to means-tested benefits may be affected (these depend on the amount of income and capital you have, which includes savings).

Key product information

To find out more, download our key product information guide for our online Lifetime ISA or our in-branch Lifetime ISA.

1.25% tax-free annual interest plus 25% Government bonus

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Your savings are protected

Your eligible deposits with Nottingham Building Society are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK's deposit protection scheme.

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Opening an account

Find out if you're eligible for a Lifetime ISA below.

In order to open a Lifetime ISA you must:

  • Be a UK resident
  • Be saving for your first home or retirement
  • Be aged between 18 and 39
  • Have at least £10 to open your account with
  • Be able to provide us with your National Insurance number
  • Meet our ID requirements and the HMRC eligibility checks.

If you're new to The Nottingham, aged 18-39 and open your account online then you can transfer in from another provider to open an account. You cannot transfer in to open a branch Lifetime ISA with us.

If you want to find out more, get in touch with your nearest branch and our advisers will talk you through the benefits of a Lifetime ISA. Alternatively, you can open an account online.


Managing your account

Navigating your account is a straightforward process. Find out more about the regulations of the account here.

You can manage your branch Lifetime ISA by passbook in any of our branches. If you have an online Lifetime ISA you can log in securely here. Currently you are not able to manage your branch Lifetime ISA online or your online Lifetime ISA in branch.

Paying money in

You can deposit up to £4,000 each year, until your 50th birthday. When you turn 50 you will not be able to make further deposits into your Lifetime ISA or earn any further 25% bonuses. Deposits will count towards your overall ISA limit of £20,000 for the 2019/20 tax year. 

You’ll need at least £10 to open your account. If you are transferring your Lifetime ISA to us, please do not send in any further payments until we have confirmed receipt of your transferred Lifetime ISA funds.

Taking money out

You can withdraw money from your Lifetime ISA if you’re:
  • buying your first home
  • aged 60 or over
  • terminally ill, with less than 12 months to live
You’ll pay a 25% charge if you withdraw cash or assets for any other reason. 

You can transfer funds in full to another Lifetime ISA or account. However, this may be treated as a withdrawal and incur a government charge.

Important note: If you want to withdraw money at any other time after your 30-day cooling off period, you’ll encounter a 25% withdrawal charge. This period does not apply if you are transferring in your Lifetime ISA from another provider to us. The withdrawal charge aims to recover the Government bonus received and apply an extra charge to the original savings. This means if you treat your Lifetime ISA as a short-term savings product, you could get back less than you paid in.


Rates and account details

Find out more about the particulars of a Lifetime ISA below.

When will my interest be paid?

We’ll pay your annual tax-free interest into your Lifetime ISA on the 5th April each year. 

Here is a rough example of what you could save and get from the Government – the actual amount will be determined by the date you deposit your money. 

This table shows the scenario if Tuck had a Lifetime ISA for three years and solidly saved £200 a month. He would only be able to use his Lifetime ISA bonus after his account had been opened for 12 months and if he was using it for his first home or when he was 60 if he wanted to save for retirement. 

 Year Savings after full year Bonus Savings + bonus Interest (1.25%) Total savings
1 £2,400 £600 £3,000 £20.31 £3,020.31
2 £5,420.31 £600 £6,020.31 £58.07 £6,078.38
3 £8,478.38 £600 £9,078.38 £96.29 £9,174.67

Current interest rates from 9 Oct 2019

Balance Tax-free p.a./AER*
£10 1.25%

Previous interest rates from 22 Aug 2018

Balance Tax-free p.a./AER*
£10 - £750,000 1.00%

The maximum you can save each tax year is £4,000. The Government will pay a 25% bonus of up to £1,000 each tax year. You can withdraw money from a Lifetime ISA to buy your first home, or at age 60. Other withdrawals will usually mean a 25% Government charge, so you could get back less that you put in. 

*We will pay your interest free of UK income tax. Your tax treatment will depend on your individual circumstances and may be subject to change in the future. The tax treatment of ISAs may also change. AER stands for Annual Equivalent Rate. It shows what the interest rate would be if the interest was re-invested in the account each year.

Lifetime ISA explained

The Lifetime ISA, or LISA, is a great way for those aged 18-39 to save for their first home or for later life and retirement. It's a tax-free savings account that lets you save up to £4,000 every year.

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Thinking about opening a Lifetime ISA? Read some personal case studies here from some of our current Lifetime ISA members.

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