Lifetime ISA

Question 1

Lifetime ISA, april 2017 - contender for retirement savings (could replace them in retirement strat)

Answer 1

• aged 18-39
• contribute until 50
• max contribution 4K per year (part of overall 20K allowance)
• each pound government bonus of 25p (max bonus of 1K)
• 32 years mean potential max bonus of 32K

Question 2

Accessing funds

Answer 2

• full and tax free at 60
• before 60 as first time buyer if no more that 450K and LISA for a year
• if access early then penalised (gov take back any interest earned and 5% of amt withdrawn)

Question 3

Cash & Equity avail

Answer 3

providers not embraced LISA and questions about long term viability

• pension max annual allowance 40K
• pension up to 75
• pension contributions with tax relief up to 75
• pension accessed in full from 55
• pension tax relief 20-45% whereas LISA 25%
• pension only 25% funds tax free and rest is taxed as earned income (LISA entire fund tax free)
• higer taxpayer pension is the better option