Skipton to launch first cash Lifetime ISA on Thursday

The ISA will pay a 0.5% annual interest rate and will currently be available online only. Those aged 18-39 can open the ISA with a minimum pay-in of £1.

Skipton has confirmed that it will accept transfers from other ISAs including the Help to Buy ISA.

Customers who subsequently take out a mortgage with Skipton, either direct or through an intermediary, will also receive £250 cashback.

The Lifetime ISA allows savers to deposit up to £4,000 tax-free, with the government paying a 25% bonus on contributions up to a maximum of £1,000 a year.

Skipton confirmed on its website that the 25% government bonus in the 2017/18 tax year will be paid after the tax year has ended. The government has indicated the bonus will be paid within 28 days of 6 April 2018, and customers will start earning interest on the bonus from the date Skipton receives it from HMRC.

From 2018/19 tax year the government will pay the bonus based on the contributions made each month. This will take four to nine weeks to be paid.

Kris Brewster, Head of Products at Skipton Building Society, commented: “As a mutual, we’ve been helping first time buyers and savers for over 160 years. The Lifetime Cash ISA could make a real difference to a new generation of savers by assisting them in getting a foot on the property ladder. That is why we’re excited to offer a product that will encourage future homeowners to save towards this significant milestone.   

“There isn’t a one size fits all approach to saving so it’s important people pause to think about their future and have a range of long-term options in mind – as well as reviewing these plans on a regular basis.

“As a building Society, our purpose has always been to support people in planning and preparing for their life ahead. And being the first in the UK to give savers more choice with the Cash Lifetime ISA, this is another way of us continuing that commitment.”