Announced in the March 2016 Budget the Lifetime ISA (LISA) can be opened by savers between 18 and 40. Up to £4,000 a year can be saved up to age 50. A 25% government top up will be added to a maximum of £1,000 a year. The money saved can go towards a first home or saved until age 60 to help to fund retirement. Contributions sit within the £20,000 ISA limit for 2016/17.
The government bonus of 25% is lost if withdrawals are made before age 60 other than to buy a first home.
The LISA is a useful addition to the investment world although pensions can still have advantages of upfront tax relief and, in some cases, employer contributions.