Martin Lewis appeared on BBC Radio 5 Live today to discuss the best financial practice. The Money Saving Expert was questioned on Lifetime ISAs and he warned on withdrawing funds from them outside of their intended purposes.
Lifetime ISAS can allow people to build savings for a first home or retirement and the Government will add a 25 percent bonus to the savings, up to a maximum of £1,000 per year.
Currently, a maximum of £4,000 per year can be placed into a Lifetime ISA and this will count to the £20,000 limit on the amount of savings that can be saved across all ISAs.
Lifetime ISAs can be opened by anyone who is aged between 18 and 40.
They can be contributed to up until the holder turns 50.
All ISAs provide tax incentives and no tax will be levied on interest in a cash account or income or capital gains from any investments held.
Additionally, if a holder completes a tax return, they will not need to declare any ISA interest, income or capital gains on it.
Aside from Lifetime ISAs, savers can also hold the following:
- Cash ISA
- Stocks and shares ISA
- Innovative finance ISA
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