Can I use the lifetime ISA on deposit for buying a home and in the FairShare government scheme?
15 November 2021
Question by Chrissy
Can I use the lifetime ISA on deposit for buying a home and in the FairShare government scheme? Also I’m 38, what way will my LISA change at when I turn 40?
Answered by Boring Money
A Lifetime ISA (LISA) can be a great way to save a deposit to buy your first home as you get a bonus of up to 25% per year on the money that you put in (up to £1000)
You can use this to buy a home of your choice as long as it costs less than £450,000 - and this includes shared ownership properties including FairShare (in Northern Ireland) - as long as the total price of the property is less than £450,000...not the share you are buying... so you can't buy a small share of a house that costs £600k..
Nothing specific happens to your lifetime ISA when you are 40, as some people choose to keep them long term and use them as part of their retirement planning, to create an income stream that is outside of their pension, so if you're not ready to buy a home for a few years don't worry. You can't pay in any money after you reach 50 (or get any further bonus) - but the account stays open and you still earn interest or investment returns.
(It's just people over 40 aren't allowed to set up a LISA if they don't already have one)
It's usually bet to withdraw the whole value of the LISA when you buy your home, as any withdrawals after this you make incur a penalty if you take the money before you are 60 - but it will depend on your circumstances, and at this point you may want to take advice from a Financial Adviser.
Hope this helps - happy house hunting