Lifetime ISA

Whether you’re putting plans in place for your first leap into home ownership, or thinking about the type of retirement you’d like to have, a Lifetime ISA could be just what you need to get started. It allows you to pay in up to £4,000 every tax year into a Cash LISA, or a Stocks & Shares LISA like the one we offer (or you can split the allowance between both). The government will then add a 25% bonus on the money you pay into your LISA every month.

It gets better. As your money will be invested in Foresters Friendly Society’s With Profits fund, it could also benefit from an annual bonus each year, plus a potential final bonus when you withdraw your money. Unlike the government bonus, these bonuses are not guaranteed.

To open a Lifetime ISA you need to be aged 18 to 39 and a UK resident for tax purposes

Although you need to be under 40 to open a LISA, once opened you can pay into the plan until you turn 50 at which point no more contributions can be made. Government bonuses will be paid on any money you pay into your Lifetime ISA up until the age of 50 and we aim to add bonuses dependent on the performance of the Foresters’ with profits fund throughout the plan’s duration.

If you’re saving for retirement your savings can be accessed from the age of 60.  If you’re saving for your first home, your savings can be accessed for that purpose at any age, but bear in mind that stocks and shares Lifetime ISAs (LISAs) are designed as medium to long-term investments. So if you are thinking of using your LISA for a deposit on your first home within the next three years or so, then the Foresters Lifetime ISA may not be right for you.

As the Lifetime ISA should ideally be held for a number of years, you may find that some of the rules and regulations covering their operation and tax status may change in the future. You won’t pay tax on your investment, but don’t forget that tax is automatically deducted from share dividends and that tax cannot be reclaimed. The addition of Foresters bonuses is not guaranteed.

If you choose to open a Lifetime ISA invested with Foresters Friendly Society, you can pay in regular monthly amounts by Direct Debit from £50 or you can invest a lump sum of at least £500. After that you can make top ups with lump sums of at least £250.

Alternatively, you can make a mixture of both regular and lump sum payments into the plan. Just remember your total contributions must not be more than £4,000 per tax year.  As LISAs are designed to be held for a number of years, the limit on annual contributions may change but we will keep you updated if it does change in the future.

Yes, you can move money from other savings or ISAs into your LISA, which could work to your benefit if your current savings are not performing as well as you would like.

Perhaps you’ve already started saving for your first home in a Help To Buy ISA. Not a problem – you can still transfer that into a LISA during the 2021/2022 tax year, and receive the 25% government bonus on those funds as well. It’s important to remember that any transfer you make from another ISA will count towards your annual £4,000 LISA limit. Before making any transfer, it’s important to check with your existing provider if there will be any penalties or loss of interest from your existing savings or ISAs.

To transfer an existing ISA all you need to do is complete the online application, which includes a transfer option. There is a transfer form that must be completed and returned to us so we can process your transfer request. We will then contact your existing provider to start the transfer process.

If you are transferring into a Lifetime ISA you already hold with us, you should complete the online Top up form, select the transfer option and make sure you provide your Foresters Lifetime ISA policy number.

Unfortunately, you can’t take out a joint LISA. But the good news is that your partner can take one out too. This way you can both benefit from the tax advantages, government bonus and growth potential. Both of you can each pay in a maximum of £4,000 to a LISA.

Not only that, both of you can each contribute £16,000 (the remainder of your annual £20,000 ISA allowance) into a normal Cash ISA or into a Stocks & Shares ISA for the current tax-year, maximising your tax free savings even further.

Yes, you can, as anyone aged 18 to 39 can apply. But you’ve not much time left, and it’s really important your LISA has money in the policy before your 40^th birthday. This is part of HMRC’s requirements for the product, as their rules say the LISA must be set up and have money deposited whilst you are still 39.

Therefore it’s a good idea to start the plan with a lump sum payment, as depending on when in the month you make your application, it could be several weeks before you make the first Direct Debit payment.  So to be on the safe side, we’d suggest you consider opening the plan with a lump sum if you’re less than two months away from your 40^th birthday.

It’s simple, but remember, your Lifetime ISA can only be used when you’re buying your first home. When the purchase is proceeding, your money that’s in the Lifetime ISA, including all government and possible Foresters’ bonuses, will be passed directly to the solicitor or licensed conveyancer who is acting on your behalf. If, for some reason, the purchase of the property doesn’t complete, the solicitor will return the money and it will be reinvested back into your plan at no loss to yourself.

Your money, along with the government bonus, will be invested into the Foresters Friendly Society consistently well performing With Profits Order Insurance Fund. The fund’s goal is to deliver growth over the medium to long term. There is the potential for annual bonuses and a maybe even a final bonus to be added to your Lifetime ISA by Foresters in addition to the government bonus, but this depends on how well the fund performs and cannot be guaranteed.

The following annual bonus rates have been declared by Foresters for our Lifetime ISA. These are paid in addition to your 25% government bonus:

The annual bonus is applied to the amount invested, less any withdrawals you may have made to your Lifetime ISA – plus any previous bonuses that have been added.

Please note that bonuses are not guaranteed. And you may not get back the full amount you invested originally, dependent on the investment conditions at the time of withdrawal. Inflation will affect what you can buy when you cash-in your LISA.

Please read our Principles and Practices of Financial Management (PPFM) to find out more about the addition of bonuses and how Foresters manage the fund.

From time to time, the product might change slightly to meet the needs of policyholders. This may affect the timings and amount of any bonuses in the future. Therefore, the above bonus rate is provided for information purposes only. It shouldn’t be considered as an indication of likely future performance.

As a friendly society, it’s particularly important to Foresters that your money is managed in an ethical and responsible way. As signatory of the Principles for Responsible Investment (PRI) it demonstrates their commitment to responsible investment, to reducing their impact on the environment and mitigating climate change risk in their investment portfolios.

When you open a plan, you can be confident that investing with Foresters means your money will be invested in a trustworthy and environmentally conscious way. The PRI is the world’s leading supporter of responsible investment and promotes a better understanding of the investment implications of environmental, social and governance (ESG) factors.

Find out more about the 6 PRI principles Foresters have signed up to here.

The money that you pay into your Lifetime ISA in any one tax year will receive a 25% government bonus which is paid monthly. So let’s say you pay £200 a month into your LISA; each month you will receive a £50 government bonus as well. The payment of these bonuses is managed for you, so you don’t need to do a thing.

There’s an annual management charge to pay, which covers the cost of managing the LISA for you. This is 2% of the value of your Lifetime ISA and will be deducted before any annual bonuses are added to the plan.

We promise it will never exceed 3% of the value of your Stocks & Shares LISA in any one year. These charges cover our costs for managing the LISA for you.  For more information about charges, please see the Lifetime ISA (LISA) Key Information Document and the Important Information.

Good question. Although the LISA is designed for you to save for your first home or later life and retirement from age 60, you can still cash it in for other reasons. However, in most cases this would incur a 25% government charge, applied to the whole amount of your withdrawal.

This effectively returns the government bonus to them, and includes any growth or other bonuses received on that money. If you do wish to make withdrawals, then we recommend you read the Lifetime ISA Important Information for further information.

If you’re unsure if this plan is suitable for you, then you should seek advice from a Financial Adviser. Please be aware that you may have to pay for this advice.