Withdrawing from a Hargreaves Lansdown Lifetime ISA

shard91

Heyy

I'm looking to withdraw all of my money from a Hargreaves Lansdown LISA, taking advantage of the reduced 20% withdrawal penalty.

I've used the HL LISA account to invest in funds which have gone up in value over time. When I withdraw the whole amount do I pay the 20% penalty on the money I've originally put in + the bonus? Or do I pay the penalty on the money I've originally put in + the bonus + interest earned from funds?

So if I put in £10,000 and received £2,500 bonus and my funds have gone up by 10% resulting in £13,750. By withdrawing £13,750 do I end up paying the penalty on £12,500 or 13,750?

Thanks in advance!!

kaMelo

As I understand it (unless the funds are used for a house purchase, you're terminally ill or you're 60) it's an unambiguous 20% penalty of withdrawn funds however the total is accumulated.

masonic

The penalty is payable on the sum withdrawn. With the penalty now at 20%, the result will be you'll have received the same growth on your capital as if the bonus had not been paid (based on your figures you'll get your £10k plus 10% growth = £11k).

shard91

Thanky you so much for clearing up!!