So what exactly is a LISA and who is it for?

A Lifetime Individual Savings Account (LISA for short) is available to open for anyone who is aged between 18-40 and is designed for someone who is looking to save towards a home, or indeed retirement - or both!

How much can you put into a LISA?

Every tax year (which runs from April 6th to April 5th every year), you can save up to £4,000 a year into a LISA. The Government will give you a 25% bonus on top of the money you put in. So, for example if you put the full amount of £4,000 in, the bonus would be £1,000. If you saved £2,000 into your LISA in any tax year, you would receive a bonus of £500.

Whilst you have to be aged 18-40 to open a LISA, you can save into a LISA until the age of 50. That means, should you be lucky enough to save £4,000 a year from the age of 18 to 50, you would receive a £1,000 Government bonus every tax year for 32 years making a grand total of £32,000 in bonuses.

If I have a LISA can I have other ISAs?

There is a maximum amount anyone can put into an ISA in any tax year - for the tax year 2024-25 the limit is £20,000. So you can have different types of ISAs but the most you can put into a LISA is £4,000 every tax year.

What can I use the money for and how can I access it?

LISA are designed for those who are looking to buy a home or save towards retirement.

If you are looking to buy a home, you can use funds once they have been in your LISA for 12 months. Further information can be found here including the withdrawal charges that apply if you want to access your LISA for anything other than buying your first home, retirement or if you are terminally ill with less than 12 months to live.

Can I carry on saving after I’ve bought a home?

The short answer is yes. You can receive the Government bonus of 25% until you reach the age of 50.

Is it right for you?

This will depend on a number of factors, not least if you are looking to buy your first home and potentially save towards retirement. With lots of options available it is also important to consider all your options and seek professional advice where appropriate.

CreditLadder works with Tembo Money a market leading LISA provider.

CreditLadder can help you improve your credit score

If you want to improve your credit position by reporting your rent payments, CreditLadder is the only way to improve your credit score and position across all four of the main Credit Reference Agencies in the UK, namely Experian, Equifax, TransUnion and Crediva. Building up a high credit score has a lot of benefits, including helping you access finance at better rates - this can also help save you money.

CreditLadder also runs a free mortgage application service in partnership with Tembo which will tell you how much you could borrow.

Remember the information provided in this article is for information purposes only and should not be considered as advice.