How I’m saving or investing with my Lifetime Isa at ages 18 to 21

3 August 2017

The Lifetime Isa (Lisa) launched in April 2016 and is designed to help people buy their first home or save for retirement.

The product is available in two forms – cash and stocks and shares. In this article, Moneywise hears from four people who have opened an account.

You can only open a Lifetime Isa if you are between 18 and 39 years old. You can pay up to £4,000 into a Lisa each year until age 50, either in cash or to invest. Whatever you pay in will be topped up with a 25% bonus from the government, up to a maximum of £1,000. Any earnings will be tax free.

For those buying a home, the property must be valued at less than £450,000 and you must have had your Lisa open for at least 12 months.

If you’re saving for retirement, bear in mind you can’t access the cash until you’re 60 – unless you pay a hefty penalty.

AJ Bell, Foresters FriendlyHargreaves Lansdown, Nutmeg and The Share Centre are the providers currently offering stocks and shares Lisas. Skipton Building Society is the only provider to offer the cash version.

We spoke to four young adults about how they are saving or investing using a Lifetime Isa and what they hope to do with the money.

‘To get a house deposit together is really hard’


Emily is a digital intern who is aged 21 and lives in Oakworth, West Yorkshire. She opened a cash Lisa with Skipton Building Society, so far the only provider to offer the cash account.

She is aiming to save around £330 each month and ultimately wants to save a £20,000 deposit so she can buy her first home. She is hoping to buy within the next five years.

“I currently live with my parents and four brothers in our family home, but I’m really looking forward to one day becoming a first time buyer and owning my very own house,” she says.

“I understand the importance of putting money aside and have various saving accounts for different goals. The Lifetime Isa seemed perfect for my house deposit savings, so after doing my research and finding this account which met my needs, I transferred my money over.

“To get a house deposit together is really hard, but with the Lisa account having the added government bonus it will make life so much easier.”

‘I want to be able to make the most of my money’

Photo of Olivia

Olivia is 18 and from Bristol. She was one of the first people to open a Lifetime Isa with Hargreaves Lansdown after launch.

Although she is about to go to university, she decided to open an account now and start putting a small amount of money away. She hopes to purchase a property in around ten years.

“By starting a Lifetime Isa early I’m hoping this will make buying my first home more achievable as I’ve made a head-start in putting money away,” she says.

Olivia chose a stocks and shares version of the Lifetime Isa as she expects it to give her a better return than cash. She also plans to move some savings from elsewhere into her new account.

She says: “As I won’t be able to afford to buy a house for a while, I want to be able to make the most of my money in a Lifetime Isa. I wanted a Lifetime Isa that allows me to invest in the stock market as I know this could provide better long-term returns than leaving it in cash.

“Hopefully, this will mean I can buy my first home quicker.”

‘My savings are locked in for a specific purpose’

Photo of Eleanor

Eleanor is 19 and lives near Horhsam in West Sussex. She opened up a Lisa account with The Share Centre soon after the product became available in order to save for her first home.

She was told about the account by her parents, who wanted her to start building up a deposit.

“I was initially encouraged by my mum and dad to open up a Lifetime Isa”, says Eleanor. “I expect to buy a house in the next 5-10 years so the main attraction of a Lifetime Isa for me personally was the additional money that the government has outlined it will contribute.”

Eleanor has already maxed out the annual £4,000 Lisa allowance and plans to invest more next year using her savings and financial gifts.

“The money primarily came from other savings I had built up. I believe the benefit of a Lifetime Isa over other savings vehicles is that your savings are locked in for a specific purpose, giving me and other savers more of an incentive to put our money away.”

‘The Lifetime Isa has provided me with peace of mind’

Photo of Louis

Louis is 21 and lives in lives in Bradford. He has been living in rented accommodation but dreams of owning a home. He says he had considered other first-time buyer schemes such as a Help to Buy Isa, but liked the way he could make large deposits into the Lifetime Isa. His cash account is with Skipton Building Society.

 “I first looked at the Help to Buy Isa and felt it seemed rather limiting due to the fact there were caps on how much I could save on monthly basis, and how much I could save across the year.

“When I heard about the cash Lifetime Isa, I felt the bonus was much more generous than the Help to Buy Isa, and the flexibility of how much I could pay in really appealed to me,” he says.

Both Louis and his partner Rebecca have opened separate Lifetime Isa products as they will be eligible for two bonus payments when they come to buy a house together.

He adds: “The Lifetime Isa has provided me with peace of mind, by knowing that I’m starting to set myself up for the rest of my life. I have a Cash Isa which I am also saving into, this is my ‘rainy day fund’ so I don’t need to dip into my other savings.

“I hope, in the not too distant future, that Rebecca and I will be able to buy our first home in North Yorkshire. It’s beautiful there and I can now see that dream become a reality.”

In reply to by anonymous_stub (not verified)

Guess I'm the only one to be using Nutmeg to save to help my son with a house deposit and repay student loads when I am 60. I'm not just going to give him the money but agree a deal where if he saves £1 then I will match it with £2 up to the limit of the LISA value...

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