Savers will be able to open a Lifetime ISA – also known as a LISA – from 9am, with a minimum deposit of £1. It will pay 0.5% interest.
People who have pre-registered interest for the savings product will be able to apply from today.
First-time buyers who decide to take out a mortgage with Skipton, either direct or via an intermediary, will also receive £250 cashback in addition to Skipton’s existing mortgage offers.
The government launched the Lifetime ISA in April to help young people save for a house, or for retirement. It offers savers a 25% government bonus.
At launch, no banks or building societies offered a cash LISA. Three providers – Hargreaves Lansdown, Nutmeg and The Share Centre – currently offer investment versions of the savings product.
People aged 18-40 can save up to £4,000 each tax year into either a cash or investment version of the product and receive a government bonus of 25%.
The money must go towards a first home worth under £450,000 or be used when the saver reaches 60 or over towards retirement.
Apart from in the first year, the government will charge an exit penalty of 25% on the entire amount including investment growth if the money is withdrawn and not used for a first home before the age of 60.
A 25 year old maximising the product’s £4,000 annual allowance for eight years will have an estimated pot of £40,776.53 by the age of 33, an amount higher than the average first-time buyer deposit, according to Skipton.
Kris Brewster, head of products at Skipton, said: “As a mutual, we’ve been helping first-time buyers and savers for over 160 years. The Lifetime Cash ISA could make a real difference to a new generation of savers by assisting them in getting a foot on the property ladder. That is why we’re excited to offer a product that will encourage future homeowners to save towards this significant milestone.”
Savers can split their £20,000 ISA allowance across a range of different Skipton products and make the Lifetime ISA a part of their wider savings portfolio.
