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Third Lifetime ISA to launch but no cash version in sight

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14/03/2017
The Share Centre has confirmed it will be one of a limited number of providers offering the Lifetime ISA when it launches next month.  

Hargreaves Lansdown and Nutmeg are the only other platforms so far to confirm they will offer a stocks and shares version of the new savings product on 6 April.

Not a single bank or building society has said it will be ready to launch a cash version of the Lifetime ISA from April.

The new ISA, which was announced by former chancellor George Osborne last year, aims to help young people buy their first home and save for retirement at the same time.

People aged 18-40 will be able to save up to £4,000 each tax year into either a cash or investment version of the product and receive a government bonus of 25%.

The money must go towards a first home worth under £450,000 or be used when the saver reaches 60 or over to go towards retirement.

The government will charge an exit penalty of 25% on the entire amount including investment growth if the money is accessed before the age of 60.

The Lifetime ISA is more generous than the Help to Buy ISA, another product aimed at helping first-time buyers onto the housing ladder.

With the Help to Buy ISA, wannabe buyers can save £2,400 a year (or £3,400 in the first year).

The maximum government bonus with the Lifetime ISA is £32,000, if the account is opened at age 18, but just £3,000 with the Help to Buy ISA.

However, the Lifetime ISA has been criticised for deterring young people from saving into a workplace pension and therefore missing out on employer contributions.

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