Meet Plum’s Lifetime ISA: the smart way to save for your first home

Hello, future home!

We’ve only gone and done it – Plum has a Cash Lifetime ISA! With a competitive rate, it’s the perfect way to help you put away the pennies (and the pounds) for your first step onto the property ladder. Plum's Lifetime ISA gives you a serious boost towards your first home with up to £1,000 a year in free government bonuses! For every £100 you save, the government adds £25 to your pot – completely tax-free. Combine that with Plum’s great rates, and you’re well on your way to cups of tea and buttered toast in your very own kitchen (not to mention chic living room, cosy bedroom, and spa-like bathroom).

What’s a Lifetime ISA, anyway?

A Lifetime ISA (or LISA) is an ISA account that helps you save for your first home or retirement. To sweeten the deal, the UK Government offers 25% tax relief on the money you save, thanks to an income tax reimbursement from HMRC. You can put up to £4,000 every tax year into your Lifetime ISA, meaning there's potential to earn a maximum bonus of £1,000 annually, completely free.

Who can use a Lifetime ISA?

Any UK resident aged 18-39 looking to buy their first home can open a Lifetime ISA and put away up to £4,000 each tax year (as part of their overall annual £20,000 ISA allowance) until they hit the age of 50. At this point, your account will stay open, and you’ll still earn interest, but you won’t be able to pay in any more money.

What are the perks of a Lifetime ISA?

With a Lifetime ISA, you can save for your first home (worth up to £450,000) or retirement. The government adds that 25% bonus to whatever you save, up to £1,000 a year. So, if you save the annual max of £4,000, the government will add £1,000, making it a total of £5,000! That means you can move into your first home sooner without saving more.

What do I need to know?

If you’re buying your first home, you can access your money after your Lifetime ISA has been open for at least 12 months. For retirement, you can withdraw tax-free after turning 60 (and indulging in a tasty slice of birthday cake!). If you withdraw for any other reason before age 60, there’s a 25% penalty, which means you could lose some of your savings.

I already have a Lifetime ISA! Can I transfer it to Plum?

Absolutely! You can only ever have one Lifetime ISA, but transferring from another provider to Plum is easy. Just enter your current Lifetime ISA details in the app, and we’ll handle the rest. Transfers can take up to 30 days, but you won’t have to lift a finger. Plus, your transfer is protected by FSCS, and with 24/7 in-app support, we’ve got you covered. Isn’t it nice to have life made a little bit more simple?

How easy is it to open a Lifetime ISA with Plum?

It’s a breeze! Hop over to the app and answer a few quick questions. We’ll work our magic in the background, and your Lifetime ISA will be ready to go after your first deposit (which can be as little as £1). You can make this deposit from your Primary Pocket or bank account.

When can I open my Lifetime ISA?

Opening a Lifetime ISA could be a smart move if you’re aiming to save for your first home or retirement. If you're between the ages of 18-39, the sooner you open one, the better! This way, you can maximise your savings potential and enjoy that government bonus.

Plum's Lifetime ISA is coming soon – sign up for the waitlist via the link below to be first in line!

[T&Cs and Lifetime ISA rules apply. Not everyone is a good fit for a Lifetime ISA account. 

With the exception of eligible withdrawals, you will be charged a 25% withdrawal fee from the HMRC. This could imply that you receive a lower return on investment from your LISA than what you initially paid for. Tax treatment depends on individual circumstances and may be subject to change in the future. The LISA is treated differently for tax purposes when compared to a pension

Please note that you will not benefit from your employer's contributions to your workplace pension plan if you decide to save in a Lifetime ISA rather than enrolling in or making contributions to it. Additionally, your eligibility for means-tested benefits, both now and in the future, may be impacted. Lastly, keep in mind that your situation will determine how you are taxed, and that regulations regarding Lifetime ISAs and taxes may change.

If considering the Lifetime ISA for retirement, we recommend you speak with an independent financial advisor. Remember, rates may change. If you sign up for the LISA, you have the right to cancel it fully within 30 days.]

[This is not financial advice. The information in this article is correct at the time of publishing.]