Lifetime ISA FAQs

You can open a Lifetime ISA if you are aged over 18 but under 40 years old when you open and make the initial investment. 

Additionally, you must be either:

• a resident in the UK,
• a Crown Servant (for example a diplomat or civil servant), or
• the spouse or civil partner of a Crown Servant.

You can apply online for your Newcastle Cash Lifetime ISA. Once your account is open, you can fund from £1 and then manage your savings online, by telephone or post.

The Lifetime ISA may be a suitable account if the below statements apply to you:

• You have never owned a home and want to save to buy a house in the UK worth up to £450,000.
• You want to save towards your retirement.

The Lifetime ISA is not right for you if you will need access to your savings for another reason, or an emergency, as you may get back less than you have saved. Additionally, the Lifetime ISA is not right for you if you intend to purchase your home within 12 months.

You can save up to £4,000 a year and can continue to pay into your Lifetime ISA until you reach 50. The £4,000 limit, if used, forms part of your overall annual ISA limit.  Please note, we need to receive your initial investment within 30 days of account opening and prior to your 40^th birthday (unless you are transferring an existing LISA from another provider).

You can make your initial deposit by electronic transfer from your bank or building society.

Your bank or building society will require the following information:

• Sort code: 23-59-54
• Account number: 00000008
• Reference: Your Newcastle Building Society account number or the reference number of your application. Your application reference number is the number supplied to you in your confirmation of application email and your account number is a 13 digit account number, for example ABC 1234567 XYZ which can be found in your welcome letter. Failure to quote your full account number may result in the payment being returned.

If any of the above information, including your reference, is missing or incomplete the payments may be sent back to your bank and not credited to your Newcastle Building Society account.

Or, please send us a cheque made payable in your name(s) quoting your Newcastle Building Society account number.

This will be your initial payment and no further payments will be taken unless you set up regular payments to this account. You can do this by setting up a standing order with your bank / building society and quoting the sort code, account number and reference information above.

Please make sure that you correctly quote the beneficiary name and payment reference when you make a payment.

What is Confirmation of Payee?
“Confirmation of Payee” has been introduced for electronic payments. This service checks the beneficiary name in the payment instruction against the name of the account where the payment is to be sent.

This service is being launched between the largest UK banking groups (Barclays, HSBC, Lloyds Banking Group, Nationwide Building Society, Royal Bank of Scotland Group and Santander UK). This service has been designed to help protect payments from scams, fraudsters and payments going to the wrong account by checking the name in your payment instruction to the name of the account where the payment is to be sent, helping to make sure you’re paying the right person. 

Sending payments to us
As we are unable to participate in the scheme at this time, when you attempt to make a payment to us for the first time you may get a response from your bank informing you that the name does not match, or is unavailable due to the provider of the account you are attempting to send money to is not a member of the Confirmation of Payee scheme.

Until the scheme is extended we will unfortunately not be able to provide a name match response to your bank.

As always, we encourage you to double check the details you enter are accurate when moving money, including when sending payments to us. 

For further information on Confirmation of Payee please visit UK Finance or Pay UK.

You can save up to £4,000 a year, and can continue to pay into your LISA until you reach 50. The account can stay open after then, but you can’t make any more payments into it and you will no longer receive the government bonus. The £4,000 limit, if used, forms part of your overall annual ISA limit.

Your savings will be kept on a tax-free basis for as long as you keep the money in your Lifetime ISA.

You can, however you can only pay into one Lifetime ISA in each tax year and the maximum amount you can pay in each year is your £4,000 Lifetime ISA allowance. 

For each Lifetime ISA you open, you will need to wait 12 months before being able to instruct your conveyancer when buying your first home.

You have 30 days from the initial account funding date to change your mind. You can cancel your account by letting us know in writing during this period and your cancelled ISA won’t count as a Lifetime ISA subscription. 

You will be able to open another Lifetime ISA in that tax year if you’re still eligible. If you choose to cancel you will get back the full amount you have paid in. You will not be entitled to the government bonus or interest within the right to cancel period.

You can have both a cash ISA and a Lifetime ISA, however, deposits into both will count towards your overall ISA allowance. 

Each tax year, which runs from 6th April to the following 5th April, you are able to invest a certain amount into an ISA. 

For the 2024/2025 tax year, this is £20,000. Your £4,000 Lifetime ISA allowance is part of this overall allowance.

We will claim the 25% bonus from HMRC on your behalf. HMRC will calculate the bonus based on the contributions you have made each month. 

Your bonus is calculated on any payments you make into your account from the 6th of the month to the 5th of the following month. Your bonus will be paid into your account within 14 days of the 20th of month two.

The bonus is paid on all contributions you make before you reach the age of 50.

Yes, you can withdraw from your Lifetime ISA, providing your withdrawal is classed as a lifetime event. Lifetime events are:

• Buying your first home
• Retirement
• Terminally ill, with less than 12 months to live
• Death.

If this withdrawal is not classed as a lifetime event, you may incur a 25% withdrawal penalty. For more information on when you can withdraw penalty-free please refer to the question below ‘When can I withdraw from my Lifetime ISA?’

You will be charged a government withdrawal charge of 25% if you withdraw your money for any reason other than one of the lifetime events outlined below:

• Buying your first home
  • The home you purchase is in the UK
  • You’re buying your home with a residential mortgage (i.e. not Buy to Let)
  • You use a conveyancer or solicitor to act for you in the purchase, and the funds are paid directly to them by your Lifetime ISA provider
• You are 60 years or older
• If you are terminally ill with less than 12 months to live
• In the event of your death
• Transferring to another Lifetime ISA provider

Please note, your Lifetime ISA must be open for at least 12 months before you can withdraw funds from it to buy your first home.

The Lifetime ISA withdrawal charge is designed so that the Government recovers the bonus and any investment growth received. Your savings may be reduced and the amount you get back may be less than you paid in.

For those saving to buy their first home, you must have held your Lifetime ISA for over 12 months to use the funds. If you are saving for retirement, you can access these funds from age 60.

To request a penalty withdrawal from your Lifetime ISA, you can call us on 0345 734 4345 (Lines are open 8am – 6pm Monday to Friday), or alternatively you can send us a secure message. You are unable to make a penalty withdrawal via your online account.

You will need to confirm the amount that you wish to withdraw. If this is the full amount, please confirm if you wish to close your account, or keep it open with a nil balance. You may wish to keep this open to continue saving in the future.

We will respond confirming the penalty amount and you will need to agree to this before your withdrawal can be processed.

Any withdrawals from your LISA which are not lifetime events will have a 25% government penalty charge applied. As well as recovering the 25% government bonus, you'll also lose some of your own savings and will receive back less than you invested. This is demonstrated in the example below.

This example doesn't include any interest earned.

You’ll need to complete an Investor Declaration form to access your Lifetime ISA funds. We must receive this from your conveyancer, who will in turn complete a Conveyancer Declaration confirming your eligibility to withdraw penalty free. 

Once we receive the correct information from your conveyancer, we will confirm you're happy before transferring the money to your conveyancer within 30 days. From this point the purchase needs to complete within 90 days or your conveyancer needs to apply for an extension.

If the purchase doesn’t proceed and the money is not returned (unless an extension has been agreed) the government withdrawal charge of 25% of the amount withdrawn will apply.

When you come to buy a property, you’ll need to tell your conveyancer you want to use part, or all, of your Lifetime ISA towards the purchase and provide them with a declaration.

Your conveyancer also has to provide us with a declaration. It’s your responsibility to ensure this is provided, but your conveyancer should do this as part of the buying process.

Once we receive the appropriate paperwork from your conveyancer, we’ll confirm we’ve received the request and then pay the amount requested to the conveyancer within 30 days without applying the government withdrawal charge. 

Your conveyancer must advise us that your purchase has completed within 10 days of completion.

Please see below for Conveyancer and Investor Declaration forms:

• Lifetime ISA Conveyancer Declaration Form
• Lifetime ISA Investor Declaration Form

You will only receive the Government’s 25% bonus if you go on to use the savings in your Lifetime ISA towards the deposit on your first home and/or towards your retirement. 

If you make a withdrawal not connected to these two events then a 25% penalty will apply to the amount you withdraw. This will recover the Government’s bonus and you may get back less than you have saved.

Your new home must not exceed the value of £450,000 and the property must be purchased in the UK with a mortgage, but not a Buy to Let mortgage. You must occupy the property as your main residence.

If both you and the person you are buying your home with are first time buyers, you can both use your Lifetime ISA for the purchase of your home without paying a withdrawal charge.

If you are a first time buyer, but the person you are buying your home with has owned a property before, then they will not be able to use their Lifetime ISA (if they hold a Lifetime ISA) for the purchase of your home without paying a withdrawal charge. However you, as a first time buyer, would still be able to use your own Lifetime ISA towards the price of the home that you are buying together.

In both cases the price of the home you’re buying must not exceed £450,000 if you wish to use your Lifetime ISA towards it without paying a withdrawal charge.

You have 90 days from your conveyancer receiving the funds from us to complete your property purchase. If it’s taking longer than 90 days, the conveyancer can write to us to request an extension.

If your purchase does not complete within 90 days of the withdrawal, your conveyancer must tell us and return the amount withdrawn to the Newcastle Cash Lifetime ISA within 10 working days, unless your conveyancer applies for an extension under the ISA regulations.

The conveyancer is able to request withdrawals from the account as many times as you wish up to completion, there is no minimum withdrawal amount. We’d require completed declarations from both you and your conveyancer each time a withdrawal is requested during this process.

You are only eligible to claim the bonus from one of the government schemes.

Yes, however in order to rent the rooms out you must occupy the property as your main or only residence upon completion of the purchase. If you withdraw funds from your Lifetime ISA to purchase a property that you intend to let, or to purchase land, you will incur a government withdrawal penalty.

There are two scenarios why you may have not received this: 

a) If the transfer date has taken place before your previous Lifetime ISA provider has received the monthly bonus payment from HMRC, it is the responsibility of the previous Lifetime ISA provider to forward the bonus payment onto Newcastle Building Society once they have received it. This will be automatically credited to your new Lifetime ISA once received by us.

b) If the transfer date has taken place after the last monthly bonus payment from HMRC and before the next monthly bonus payment request date to HMRC, we will automatically ensure the bonus request is included within the next payment request. You will receive confirmation of the amount received once this has been credited to your Lifetime ISA.

We can't give you advice on whether the account is suitable for you as a retirement fund.

A Cash Lifetime ISA may not be the best option for your retirement savings. If you are thinking about one as a way of boosting your retirement savings then you should think about when you intend to retire, what other provisions for retirement you are making (such as a pension) and whether a Lifetime ISA will help you meet your savings goals (for example, will it help provide sufficient income in retirement).

You should consider if saving in a Cash Lifetime ISA is the right option for saving towards your retirement. If you are employed, you should consider the potential availability of a workplace pension scheme through an employer, which provides employer matched contributions, and your tax position.

If you save in a Lifetime ISA instead of enrolling in, or contributing to, a pension scheme from your employer or personal pension scheme:

• You may lose the benefit of contributions by an employer (if any) to that scheme; and
• Your current or future entitlement to means tested benefits may be affected (these depend on the amount of income and capital you have, which includes savings).

A financial adviser will be able to help you map out the best route to plan for your retirement.

When you reach your 60th birthday, you will be able to withdraw from your Lifetime ISA penalty-free.

This won’t affect your Lifetime ISA, it just means you’ll have access to your Lifetime ISA before you retire. As it’s based on age rather than retirement age, you can withdraw your Lifetime ISA at 60, transfer to another savings account or leave your funds in your Lifetime ISA.

No, we only accept full Lifetime ISA transfers.

The transfer will commence once we have received the transfer instruction and any documentation required to support your application. 

A transfer request should be completed within 15 working days from when the transfer request is received (for a Cash Lifetime ISA transfer) and 30 calendar days for a Stocks and Shares Lifetime ISA transfer. 

If you do send funds to us before the Lifetime ISA transfer is complete, they will be retained by us and we will only credit these to your account once the Lifetime ISA transfer has completed. 

You will not receive any interest on these funds until they have been applied to your Lifetime ISA.

The transfer will commence once we have received the transfer instruction and any documentation required.  

A transfer request should be completed within 15 business days from when the transfer request is received.  

A Lifetime ISA can only be funded via a completed Lifetime ISA transfer or via new investment.

Lifetime ISAs are not currently part of the eISA transfer service. Any Lifetime ISA transfers must therefore be completed via a paper transfer between your existing and new Lifetime ISA providers.

The Newcastle Cash Lifetime ISA is not open until the Lifetime ISA transfer from the previous provider has completed. No interest will be paid on any additional funds received until the transfer is complete and the Newcastle Cash Lifetime ISA is open.