New cash Isa for under-40s

SKIPTON Building Society will launch the first cash Lifetime Isa (Lisa) tomorrow. This type of tax-free deal was created by the Government in April to help house deposit or retirement savers.

Until now, savers only had access to a few investment Isas.

Skipton will pay 0.5pc on cash deposits from £1 — less than half the 1.11pc top easy-access deal from Charter Savings Bank. To open a Lisa, you must be between 18 and 39. You can save up to £4,000 a year, for up to £1,000 in government top-ups, until age 50.

After the first year, there is a 25pc charge to withdraw cash before age 60 for anything other than a first home. Anna Bowes, of Savings Champion, says: ‘It’s great to see a cash Lisa at last, but the rate is very uncompetitive.’