ISA guides tagged “Lifetime ISA”

What gov.uk says about a Lifetime ISA, workplace pensions and private pensions, and how they differ on paying in, tax and taking money out.

The usual ISA pitfalls are withdrawing instead of transferring, paying in over the allowance, Lifetime ISA age limits, and assuming protection that does not exist. Here is what the rules say about each.

According to gov.uk, an ISA you already hold can stay open if you become non-UK resident and keeps its UK tax relief, but you cannot pay into it unless you are a Crown employee overseas or their spouse or civil partner.

The 25% Lifetime ISA charge applies to the total amount in the ISA, including the bonus, when the whole balance is withdrawn, so an early withdrawal can pay out less than was paid in. The examples below show the arithmetic.

A transfer moves an ISA to another provider using a transfer form, while withdrawing the money yourself means you cannot reinvest that part of your tax-free allowance. Lifetime and Junior ISAs have extra restrictions, and a Lifetime ISA moved to another ISA type before the penalty-free age can attract the withdrawal charge.

HMRC's newsletter says the annual limits stay put until April 2031. A lower cash ISA limit from April 2027 is made in law but not yet in force, and a First Time Buyer ISA is only a proposal.

How the Lifetime ISA bonus adds up over time, with worked examples of payments, bonus and withdrawal charge. Assumed figures, not forecasts.