A taxpayer can make full use of the ISA allowance before 5 April 2019 and, if the 2019/20 tax year allowance is used on or shortly after 6 April 2019, so you can effectively move up to £40,000 into a tax free savings pot within the next few weeks.
Individuals aged between 18 and 40 can contribute up to £4,000 per year into a Lifetime ISA (LISA) and receive a 25% bonus from the government. The LISA is designed to help first time buyers save for a deposit on their first home, or towards their retirement. Payments into the LISA and the bonus can continue until the individual is 50 years old.
There is a 25% penalty charge (and interest is also applied) on withdrawals made before the age of 60 unless the taxpayer uses the funds to purchase a first home. There are no tax implications to withdrawals after the age of 60, making these a simple and flexible addition to pension contributions.
It should be noted that ISAs are not generally IHT-free.
