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February 20, 2024
6 minute read
For many first-time buyers in the UK, the journey to homeownership can feel like an endless, uphill battle. However, the Lifetime ISA (aka LISA) can make turning this dream into a reality a little easier.
A Lifetime ISA is a government-backed savings product, designed to boost the house funds of aspiring homeowners who are on their path to purchasing their first home. Note that they can also be used to save for retirement, but we’ll focus on the homebuying aspect for now.
They were introduced back in 2017 as a new way to help people to save for their first home, with the help of an annual 25% government bonus.
Since then, a number of providers (including Tembo) have begun to offer Lifetime ISAs. So, if you’re thinking about opening one, or you have a LISA already but want to be sure you’re getting the best deal, read on…
In short, you can save up to £4,000 tax-free each year into a LISA, and you’ll get a 25% bonus on top from the government. That means for every £4 you save in a tax year, the government will give you £1.
There are two types of Lifetime ISA available – a Cash Lifetime ISA, or a Stocks and Shares Lifetime ISA.
A Cash Lifetime ISA works like a regular savings account – you save money in cash, and get an interest rate on your savings. The interest rate is set by your provider, and changes over time in response to the Bank of England base rate, or other factors.
With a Stocks and Shares Lifetime ISA you invest your money into a fund which in turn invests in the stock market. You could see a greater return in the longer term with a Stocks & Shares LISA, but this isn’t guaranteed, and your investments could go up as well as down.
For simplicity, in this article we’re going to focus on the Cash Lifetime ISA product.
In February 2024, Tembo launched their market-leading Cash Lifetime ISA offering, specifically designed to help first-time buyers achieve their homeownership goal sooner.
Ready to take the first step towards homeownership with Tembo’s Cash Lifetime ISA? Getting started is quick and easy – in fact, opening an account or transferring an existing Lifetime ISA only takes 5 minutes and can all be done digitally. Simply follow this link to get started.
*NerdWallet data based on S&P 500 returns.
Market-leading is based on the current available Cash Lifetime ISA providers as of 19th February 2024, excluding introductory offers. A saver would generate an additional £614 in interest over a 5-year period of maxing out their Cash Lifetime ISA with Tembo versus the next closest provider. Rates are accurate as of 19th February 2024, but may be subject to change.
Tembo Lifetime ISA: The 25% bonus and tax-free benefits of these accounts depend on government policy, tax rules and your eligibility to subscribe, which can change. Withdrawal other than for an eligible house purchase or retirement will result in a 25% withdrawal penalty from the UK government which means you may get back less than you put in.A Lifetime ISA can also be used for retirement from age 60. Please check you’re not losing out on other pension benefits from your employer.
Tembo investing product (Tembo Stocks & Shares Lifetime ISA): If you open a Tembo Stocks & Shares Lifetime ISA, it’s important that you know the value of your investment could go up as well as down. You could get back less than you put in, which means it would take you longer to buy your first home. Past performance is not necessarily a guide to the future and investing is not intended to be a short-term option. We can’t and don’t provide financial advice so please be sure that investment risk is right for you.
Visit Tembo website for more information on the Tembo Lifetime ISA eligibility, Tembo Lifetime ISA Key Features, the Customer Agreement and our Privacy Policy.
Tembo, Tembo Lifetime ISA, Tembo LISA and Nude are trading names of Nude Finance Limited, which is authorised and regulated by the Financial Conduct Authority (FRN: 928010) and registered as an account information services provider (FRN: 913654). We are a private limited company registered at 18 Crucifix Lane, London, SE1 3JW, with registration number 12008146. Nude is a registered trade mark of Nude Finance Limited (12008146) (TM Reg No UK00003263387).
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