The Lifetime Isa (Lisa) is a great way for young people to save for their first home or to help fund the cost of retirement.
There are two versions – one for cash and another for stocks and shares.
You can save up to £4,000 per year in a Lifetime Isa, either as a lump sum or as smaller payments throughout the year.
The scheme is designed to encourage people to save early and the government will top up your savings with a 25% bonus - up to a yearly maximum of £1,000. All earnings are tax free.
Anyone aged between 18 and 39 can open an account. However, once you turn 40 you are no longer eligible.
There are further restrictions on what you can use your Lifetime Isa for. Read the Moneywise guide to buying a house using an Isa to find out more information.
If the account is right for you, here are our Moneywise Best Buys.
Best Cash Lifetime Isa
Skipton Building Society Online Cash Lifetime Isa 0.75%
The only provider currently offering a cash version of the Lifetime Isa is Skipton Building Society. It pays 0.75% to savers on its online-only account. On top of the government bonus, Skipton is also offering £250 cashback for customers who go on to take out a mortgage with the society.
Top Stocks and Shares Lifetime Isas
There are more options for those looking to invest using a Lifetime Isa, with many of the biggest stockbrokers already offering products.
The AJ Bell Lifetime Isa has an annual platform charge of 0.25%, plus additional fund charges. This compares with a 0.45% yearly charge at Hargreaves Lansdown on portfolios worth up to £250,000, plus additional fund charges also apply.
Moneybox charges £1 a month and 0.45% of the value of your investments per year.
Nutmeg investors face a 0.75% annual charge for fully managed portfolios of up to £100,000. It charges a lower 0.45% fee for fixed allocation portfolios. Additional fund charges again apply. Nutmeg also does not accept transfers from other providers.
The Share Centre offers three funds for investors, depending on their level of risk. There are charges of between 1.69% and 1.82% on these, including its 0.75% annual management charge.
Elsewhere, OneFamily charges a 1% annual management fee - and you are limited to investing in two of its own funds - while Foresters Friendly Society has a 1.25% annual management charge, and you can only invest in its own fund.