Paragon Bank launches Lifetime ISA

26 Nov, 2019

26 Nov 2018 Paragon Bank has introduced new competition to the Lifetime ISA market, launching a Cash Lifetime ISA (LISA).

The Lifetime ISA currently pays 1.15% and can be opened between the ages of 18 and 39, allowing customers to save up to £4,000 a year tax-free and receive a 25% government bonus until they turn 50.

If they are willing to lock their cash up for longer, savers can earn more, as funds cannot be withdrawn without being subject to a 25% government charge, unless they are to be used for the purchase of a first home or for retirement.

If used for retirement, the funds can be withdrawn free of charge once the account holder reaches the age of 60, however the savings will stop earning the 25% government bonus and cannot be added to once the account holder turns 50.

Derek Sprawling, Savings Director at Paragon said: “The Lifetime ISA is a fantastic opportunity for savers to earn a considerable amount of money on their savings towards their first home or retirement.

“If you save the maximum amount into a LISA every year between 18 and 50, you will have earned a £32,000 government bonus alone.

“The imminent end of the Help to Buy ISA should increase the appeal of the Lifetime ISA scheme.”

Further information on Paragon Bank’s Lifetime ISA can be found here.