Lifetime ISA early withdrawal charge scrapped for 2017/18 only

December 16, 2016 | 4years | In the News

The 25% charge for early Lifetime ISA withdrawals will be scrapped in the first year of the scheme, the Treasury has announced.


Speaking in the House of Commons, the financial secretary to the Treasury said it would make a “small change” to charges on early withdrawals from the Lifetime ISA (LISA) in the first year of its operation, “for the benefit of consumers”.
 
The Lifetime ISA details so far

The Lifetime ISA (LISA), is set to launch in April 2017 to help young people buy their first home and save for retirement.

It will allow savers to contribute £4,000 each tax year and the government will top it up with 25% – £1,000 each year. See YourMoney.com’s All you need to know about the Lifetime ISA guide for further details of the scheme.

In September, the Treasury published an update on how the LISA will work, including that in the 2017/18 tax year, the bonus will be added at the end of the tax year, while from 2018/19, the bonus will be paid on a monthly basis.

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