The forthcoming lifetime individual savings account (Lisa) will pay savers a government bonus on a monthly basis from April 2018, helping them to grow their pot more quickly. The Lisa, which will launch in April 2017, is designed to help under-40s get on to the property ladder or save towards retirement by awarding them a 25 per cent government bonus on savings of up to £4,000 a year.
The government also says that the bonus will be paid on the amount contributed by savers, rather than the value of the funds. This will safeguard the level of the bonus from decreases in the value of the savings due to market falls.
Unlike Help to Buy Isa savers, Lisa savers will also be able to withdraw money from their pot at the point of exchanging contracts, rather than on completion.