On the Money: How Lisa - the lifetime ISA - may not be all she seems

If you’re saving for a deposit on your first home or for a pension, there’s a new tax-free savings account being offered from next week that could get you a 25% bonus from the Government.

From April 6, adults under 40 can open a Lifetime Isa — but you’ll struggle to find it offered on the High Street, because many banks and building societies reckon it is too complicated.

The Lisa, as it has become known, will offer a Government handout to encourage people to save for a home or for their pension.

It is aimed at people aged 18 to 40 and allows them to save up to £4000 a year in the account. The Government will top up the amount you stash in there by 25%, so anyone using the full £4000 allowance could get an extra £1000.

Save the maximum into the account for a decade and you’ll have put in £40,000, which could mean getting a £10,000 bonus from the Government.

The maximum bonus for a Lisa is £32,000, which is what someone could get if they open one at 18 and put in £4000 every year until 50, the maximum age at which you can contribute.

But it’s not a simple handout, which is why so many financial firms have opted to steer clear of it.

You are only allowed to withdraw the cash to buy a home or when you want to retire. If you need it early for any other purpose, you will be charged a 25% penalty to get at your cash.

So if you’ve saved the maximum for a decade, you’d have £50,000 in your Lisa, including the Government bonus.