Boost your savings with a
25% government bonus
Looking to either buy your first home or save for your retirement? Then take a look at our Lifetime ISA (also known as a LISA). It’s a little different to other ISAs because the government gives you a very healthy 25% monthly bonus on whatever you’ve saved. The question is, why wouldn’t you open one today!
It’s harder than ever to get onto the property ladder. And when it comes to saving for the future, well, it’s good to have all the help we can get. The Lifetime ISA is designed to help people buy their first home, or to build additional savings for their retirement. And, so your pot grows as quickly as possible, the government will add a monthly 25% bonus to your savings, up to a maximum of £1,000 per year.
A little thank you for a big decision
There’s more good news. Take out a Lifetime ISA online, or submit a transfer request, with a lump sum investment of £4,000 and we’ll send you a £40 M&S Gift Card. This will be once the investment has remained in place for 3 months.
Why choose the Lifetime ISA?
The Lifetime ISA is designed for people saving for their first home or retirement for the medium to long term.
Available to all UK residents aged 18 to 39. Whilst you can’t take out a joint Lifetime ISA, your partner can also take one out.
Your Lifetime ISA will receive a 25% government bonus, up to £1,000 each tax year.
Save up to £4,000 each tax year. Save regularly from £100 per month (or £50 if you are an existing Foresters member or child/grandchild of a member) or invest a lump sum of at least £500. Top ups of £250 or more can be made thereafter.
Your money is invested in our top performing With Profits fund which means you may also benefit from additional annual and final bonuses from Foresters. (Source: Barnett Waddingham Dec 2018)
Access to Foresters Extras – membership benefits – including discretionary grants to help you to cover the cost of things like higher education and healthcare costs.
“The Educational Awards Fund grants have supported me throughout my first degree in Sport and Exercise Science and will now continue to support me as I start a second degree to fulfil my dream to become a Physiotherapist. The medical books needed for physiotherapy are very expensive, so this grant is a big help.”
What is a Lifetime Individual Savings Account (Lifetime ISA/LISA)?
Fancy getting on the property ladder? Or looking to save for your retirement? A Lifetime ISA could help. It’s a savings account that helps you to achieve your future plans, tax free. Whether that’s purchasing your first home with a value of less than £450,000. Or providing a cushion for when you’ve stopped work.
You can pay in up to £4,000 each tax year into a Cash LISA, or a Stocks & Shares LISA like the one offered by us (or split the allowance between both), and the government will add a 25% bonus on the money paid into the LISA by you each month. A very welcome bonus!
We aim to add an annual bonus each year too, plus a possible final bonus when you withdraw your money. The addition of Foresters bonuses is not guaranteed.
You can open a LISA if you’re aged 18 to 39 and a UK resident for tax purposes. Tax rules may change and depend on individual circumstances.
How long can I save in a Lifetime ISA?
The LISA is designed for people saving for their first home or alternatively for later life or retirement when your savings can be accessed from age 60. Whilst you have to be under 40 to open a LISA, once open you can pay into the plan until you turn 50, with government bonuses being added. From age 50, no further contributions can be made.
Lifetime ISAs (LISAs) are best viewed as a medium to long-term investment. If you are planning to use your LISA for a deposit on your first home and are looking to buy a home in the next 3 years, then our LISA may not be right for you.
Because the Lifetime ISA is designed to be held for a number of years the rules and regulations covering their operation and tax status may change in the future. You won’t pay tax on your investment, but it’s worth remembering that tax is automatically deducted from share dividends and that tax cannot be reclaimed. These tax rules also depend on your individual circumstances.
How much can I pay into a Foresters Lifetime ISA?
To open a Foresters LISA, you can choose to contribute regular amounts from £100 per month by Direct Debit (or from £50 per month if you are an existing Foresters member, or child/grandchild of a member), or invest a lump sum of at least £500. You are then able to invest lump sums of a minimum of £250 as top ups. Or if you prefer, you can use a combination of both, as long as your total contribution is not 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 in the future.
Even your parents or grandparents can help
We know how hard it can be to save for big things like a first home or retirement, so if your parents or grandparents want to help you, this will enable you to reach your savings goal quicker. While they are not allowed to invest directly, they can pass the money to you to put into your LISA.
Can I transfer a Help to Buy ISA or other savings into a Lifetime ISA?
Yes, if you have other savings or ISAs that are not performing as well as you would like, you could consider moving that money into your LISA. If you’ve already started saving for your first home in a Help To Buy ISA, you can transfer that into a LISA during the 2019/2020 tax year, and receive the 25% government bonus on those funds too. Any transfer from a Help To Buy ISA will however count towards your annual £4,000 limit. Before you do this, it’s important that you ask your existing providers if there will be any penalties or loss of interest from your existing savings or ISAs so that you can make an informed decision.
Transferring an existing ISA is simple. All you need to do is download and complete this transfer application form, then send this to us and we will contact your existing ISA provider to start the transfer process.
Can I open a joint Lifetime ISA with my partner?
Although you can’t take out a joint LISA, your partner can also take one out, so you can both benefit from the tax advantages, government bonus and growth potential from Foresters. Both you and your partner can each contribute a maximum of £4,000 to a LISA. In addition to this, for the 2019/2020 tax-year you can also each contribute £16,000 in a normal Cash ISA or into a Stocks & Shares ISA like the one we offer.
How does the process of paying towards a first home work?
When you’re buying your first home, we don’t pass the proceeds on to you. Instead, they go 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 to us. We’ll then reinvest it back in to your plan at no loss to yourself.
Where is the money invested?
The money you pay into your Stocks & Shares LISA, together with the government bonus, is invested in our top performing With Profits Order Insurance Fund, which aims to provide growth over the medium to long term. Annual bonuses and a possible final bonus may be added to your LISA by Foresters. The value of these bonuses depends on how much profit our fund makes and this cannot be predicted.
We have declared the following annual bonus rates for our Lifetime ISA, which are paid in addition to your 25% government bonus:
|Year||Annual Bonus Rates|
The annual bonus is applied to the amount invested (minus any withdrawals you may have made to your Lifetime ISA) plus any previous bonuses that have been added.
The addition of any bonus is not guaranteed and you may not get back the full amount originally invested, dependent on the investment conditions at withdrawal. Inflation will affect what you can buy when you cash-in your LISA.
To find out more about the addition of bonuses and how we manage our fund please read our Principles and Practices of Financial Management (PPFM).
We may vary the design of a product to best meet the needs of our policyholders which may affect the timing and size of future bonuses. Therefore the above table is provided for information purposes only and should not be considered an indication of likely future performance.
How are government bonuses paid?
The 25% government bonus your Lifetime ISA receives is based on the contributions that you make in any one tax year and is paid on a monthly basis. So, if you pay in £200 a month, your plan will receive a government bonus of £50 that month too. We will liaise with the HMRC to ensure that your Lifetime ISA receives the government bonus – you don’t need to do a thing.
Are there any charges for the Lifetime ISA?
There’s an annual management charge. This is initially set at 1.25% of the value of your Foresters Lifetime ISA, which will be taken into account when calculating policy bonuses. This may change but 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 (monthly contribution), Key Information Document (lump sum payment) and Important Information.
What happens if I want to cash-in my LISA and it’s not to buy a home or for retirement?
The LISA is designed for people saving for their first home or later life and retirement from age 60. So you should only plan to use the funds for those purposes. You are still able to cash it in for other reasons, but in most cases this would incur a 25% government charge, applied to the whole amount of your withdrawal.
This charge returns the government bonus to them, including the growth or other bonuses received on that money, plus a small penalty for the withdrawal. If you do wish to make withdrawals, then it’s important to read the Lifetime ISA Important Information for further details.
I’m not sure if a Lifetime ISA is right for me. What should I do?
If you’re unsure as to the suitability of this product you should seek advice from a Financial Adviser. Of course, you may have to pay for this advice.
Added value for you – Foresters Extras
Taking out a Lifetime ISA is only the start. By doing so, you’ll be a part of the Foresters Friendly family and can enjoy some wonderful, unique benefits including discretionary grants to help you cover the cost of things like higher education, dental and optical costs.
Three ways to top up an existing Lifetime ISA
Make a one-off, secure, payment from your debit card. Top up online now.
Call us on 0800 988 2418 and we can take a payment from your debit card over the phone.
Download the Lifetime ISA Top Up Form and either complete the Direct Debit instruction or attach a cheque for the lump sum contribution amount, then send it back to us and we will do the rest for you.
We’re here if you need help or have any questions
If you’re a little stuck and need help, please get in touch. Our UK based team can help to make things as smooth and easy as possible (lines are open Monday to Friday 9 am to 5 pm).