Government drops LISA exit charge for scheme's first year

Tom Ellis
clock • 1 min read

The government has decided to drop the 5% withdrawal penalty charge on the Lifetime ISA (LISA) for savers exiting the scheme in its first year.

The LISA will allow those aged between 18 and 40 to open an account and save up to £4,000 a year until age 50 and access the savings either to buy a first house or help fund their retirement. Contributions into the savings scheme will receive a government bonus of 25%, however savers will lose their government bonues and incur a 5% exit charge if they access their LISA savings outside of the qualifying life events. The Treasury has predicted 800,000 savers will contribute to LISAs by 2020/21. Tax Incentivised Savings Association (TISA) director general David Dalton-Brown (pictured) wel...

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