Lifetime ISA and Help to Save schemes become law

Scales2The Lifetime ISA will be available for young adults from April 2017 as the Savings (Government Contributions) Bill receives Royal Assent.

The Help to Save scheme to help people on low incomes will be available from 2018.

Savers will be able to take advantage of two new government backed savings schemes, one of which will be available from April, as the Savings Bill became law this month. The government’s new savings incentives come at a time when four in ten people have less than £500 in savings.

The Lifetime ISA (LISA) and ‘Help to Save’, which carry generous bonuses, are part of the government’s commitment to supporting savers at all income levels and at all stages of their lives.

The LISA, available from 6th April 2017, can be accessed to put towards a first home or once the account holder turns 60. Under this savings scheme, adults under 40 years of age will be able to save up to £4,000 a year, with the government giving them a 25% top up on their savings.

Help to Save, which will follow the LISA in 2018, is aimed at supporting people on low incomes to build up their savings. It carries a 50% government bonus on savings up to £50 a month for up to four years. Help to Save will be available through NS&I to any adult who is receiving working tax credit, or Universal Credit with minimum household earnings equivalent to 16 hours a week at the National Living Wage.

To encourage people to save as much as they can, the bonus will be based on the highest balance achieved in the account, not the standing balance. Roughly four million people could benefit from this new scheme.

Further information

  • Help to Save example – saving the full £50 a month for two years would mean a bonus of £600 on £1,200 of savings – and continuing to save the maximum amount for a further two years would mean another £600 bonus
  • Lifetime ISA example – savers will be able to contribute up to £4,000 every year and receive a bonus of up to £1,000 – they can withdraw the savings including the bonus to put towards a first home, or leave them in the account, getting tax-free investment growth, until they reach 60
  • for 2017-18 only, savers will be able to transfer Help to Buy: ISA savings into a Lifetime ISA without them counting towards the £4,000 contribution limit


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