ISAs, Lifetime ISAs (LISA) and Junior ISAs – what’s the difference?

ISAs LISAs Junior ISAs
Age criteria. Anyone over the age of 18 (over 16 for cash ISAs) Anyone aged between 18 and 40 Anyone under 18.
Allowance
for
17/18
tax
year
£20,000 £4,000. The amount paid into a LISA counts towards the account-holder’s ISA allowance. £4,128
Bonus None The government adds a bonus of 25% to the amount paid in each year until the account holder turns 50. None
Conditions You do not have to keep an ISA for a specific duration, although some accounts have a fixed or minimum term. Account holders can continue paying in until they are 50. They can use the money at any time as a deposit for their first home costing less than £450,000. They can withdraw money for retirement purposes at age 60. The child can take control of the account when they reach the age of 16 but can’t withdraw the money until they are 18.

ISA facts

Transfer savings or investments you have

If you have investments or savings that are not already tax-efficient you should consider cashing them in and transferring the proceeds into an ISA. However, it is essential to consult a professional financial adviser before you do so.

One ISA every tax year

You can take out one ISA every tax year, so if you don’t take out an ISA by 5 April 2018 you will lose the opportunity to shelter up to £20,000 from tax. The allowance applies to all adults resident in the UK for tax purposes, so a couple can shelter up to £40,000 from tax in this tax year.