Lifetime Isa pays savers top rate
Choice is growing for savers as Newcastle Building Society has become the third institution to offer a cash Lifetime Isa ( Lisa), with a market-beating rate.
The Lisa allows those aged 18 to 39 to save up to £4,000 each tax year, with a government top-up of 25pc on contributions until the age of 50.
The cash can be used to buy a first home or to boost retirement income.
The Newcastle account pays an annual interest rate of 1.1pc. Rival deals from Skipton and Nottingham building societies both pay 1pc.
The Newcastle Lisa can be opened online with as little as £1.
Currently, the Newcastle Lisa must be opened directly with the mutual and existing Isas cannot be transferred to it.
However, the account is a “limited issue”, according to Newcastle’s website.
Rachel Springall of Moneyfacts, the financial research firm, pointed out that first-time buyers could get interest of up to 2.55pc from a Help to Buy Isa and still get the 25pc top-up from the Government.