You can use a Lifetime ISA towards a deposit for a first home or retirement. In either case, it's tax free and you can take advantage of a 25% government bonus.
With investment, your capital is at risk. Lifetime ISA rules apply
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The Lifetime ISA is an initiative launched by the government to encourage people aged between 18 and 39 to put money aside for their first home or retirement. You can contribute up to £4,000 per tax year and the government will give you a 25% bonus – that's up to £1,000 every year.
You can use your Lifetime ISA to buy your first home worth up to £450,000 or invest into it until you turn 50 and access it age 60. In either instance, you can withdraw your money, including the 25% bonus, tax-free. Withdrawing outside of these scenarios means you will incur a penalty, and you may end up getting less than you originally contributed.
Sign up to a Nutmeg Lifetime ISA in minutes and let us do the investing for you. Flexible, transparent and designed by experts, we democratise wealth management and take the nonsense out of investing.
Our in-house investment team have built a range of portfolios for our Lifetime ISA suited to your chosen risk level and investment style. Our experts will then take the difficult decisions on your behalf. Because investing shouldn’t be complicated.
It’s easy to open a Lifetime ISA with us. Log in from any device and start with as little as £100. We charge no exit fees and give you the flexibility to make changes to your risk level and investment style as your situation changes.
You have 24/7 access to your account, so you can always see where your Lifetime ISA is invested and – crucially – how it’s performing. But that’s not all. Our customer support will be on-hand to field any questions you have.
All three Nutmeg investment styles are built by experts and use exchange traded funds (more on ETFs here) to diversify across stocks, bonds, industries, even countries. Choose the one that works for you.
“I want my LISA managed by experts and invested in line with my values”
“I want experts to take a hands-on approach to my LISA investments”
“I want a diversified portfolio without the cost of continuous management”
Below you can see a detailed breakdown of our performance over the past few years, as well as how our investments are allocated across countries and assets.
Explore our full 7-year track record for each of our 10 risk-based fully managed portfolios and see how our results compare against our competitors.
This past performance is simulated but based on real market transactions, with all customer portfolios represented as a single portfolio for each risk level. Past performance is not a reliable indicator of future performance.
*The annualised figure is the return since inception expressed as a compound annual rate. For example, a portfolio with an annualised return of 6% corresponds to an actual return of 19.1% over three years (rather than 18% as you might expect) due to the effect of compounding.
Capital at risk. Lifetime ISA rules apply
If you’re a UK tax resident aged between 18 and 39 you may be able to open a Lifetime ISA. There are different eligibility requirements for certain types of ISA.
Having a stocks and shares Lifetime ISA means you’re investing your money, not just saving it in cash. Whether or not you should have one will depend on what your goals are, how long you’re able to invest your money, and your attitude to risk.
If you’re willing to accept investment risk to get on the property ladder or contribute more to your retirement, the 25% government bonus on contributions up to £4,000 makes for an attractive proposition.
The Lifetime ISA is an initiative launched by the government to encourage people aged between 18 and 39 to put money aside for their first home or retirement. For every £4,000 they contribute per year, the government will contribute £1,000 (otherwise expressed as a 25% annual bonus)
You can use your Lifetime ISA allowance to buy a first home worth up to £450,000 or keep it until you turn 60. In either scenario, you can withdraw your money, including the 25% bonus, tax-free.
The Lifetime ISA is available as a cash ISA or a Stocks and Shares ISA (although Nutmeg only offers a Stocks and Shares Lifetime ISA). You can also hold a Lifetime ISA alongside other cash, stocks and shares, or Innovative Finance ISAs.
Although the Lifetime ISA cap on contributions is £4,000 per tax year, contributions to any ISA count towards a collective total annual ISA allowance of £20,000.
You can withdraw money from your Lifetime ISA either to fund the purchase of your first home (up to the value of £450,000) or when you’re aged 60 years or older. Anything else and withdrawing from a Lifetime ISA carries strict withdrawal rules and penalties.
Barring a terminal illness, you’ll have to pay a 25% government withdrawal charge (the withdrawal penalty will be temporarily reduced from 25% to 20% from 6 March 2020 till 5 April 2021 due to coronavirus) meaning you’ll get back less than you’ve put in.
If you’re looking to buy with a partner, sibling or friend, you can split your Lifetime ISA benefits.
The money from your Lifetime ISA can also be used to purchase property under a shared ownership scheme, provided the full value of the property falls within the £450,000 limit.