MSE News: Lifetime ISA withdrawal penalty scrapped for 2017/18

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Savers using the new Lifetime ISA (LISA) won't be charged the usual 25% penalty for withdrawing money which isn't put towards a first home or retirement in the first year of the scheme, the Government has announced...
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'Lifetime ISA withdrawal penalty scrapped for 2017/18'

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'Lifetime ISA withdrawal penalty scrapped for 2017/18'

Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.
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You need to have held the Lifetime ISA for a year before you can use the bonus. The first bonuses aren't being paid until April 2018.
VSP 2018 #9 ~ £19.55/£180.00
CCCC 2018 #1 ~ £20.75/£180.00
I do like this idea - as mentioned above it gives you a chance to evaluate if the account is working for you.
Lingua
In the September 2016 update:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/553333/Lifetime_ISA_technical_note_September_2016_update.pdf
It's usual that prior to a new tax product being made available they take account of some feedback.
As they were not going to apply the bonus until the end of the first tax year anyway, there's no big deal about giving you a penalty free withdrawal before that point. The charging of a penalty to recover the freebie before you actually got anything free would have been a bit silly, so they have clarified what they intend to do. The product isn't available yet and presumably the (re)drafting of the operational rules are not going to cause any real problems to the providers.
The 25% hit recoups the bonus + a little bit so you're not losing that much. But they're the T&Cs of the account. Take it or leave it. You can stick with a Help to Buy ISA if you might not use it for a mortgage but obviously wouldn't be able to transfer the H2B ISA funds to a LISA beyond 17/18 without it counting towards the £4,000 payment limit.
Lingua