Newcastle Building Society has launched its cash Lifetime Isa, the third of its kind, to the market.
Newcastle announced its intention to launch earlier this month and today (26 October) introduced the product at a rate of 1.10 per cent.
The lender is only the third in the UK to launch the cash version of the product, joining Skipton Building Society, which launched its version in June 2017, and Nottingham Building Society, which launched its product in August.
The Lifetime Isa is offered more widely in a stocks and shares form, with Hargreaves Lansdown, OneFamily and Nutmeg offering the product amongst others.
Lifetime Isas allow individuals aged between 18 and 40 to save up to £4,000 per year and receive a government bonus of 25 per cent towards a new home or pension.
Stuart Miller, customer director at Newcastle Building Society, said: "Helping people own their home and plan for the future is core to our purpose, and Lifetime Isa helps both these sets of savers.
"Encouraging and rewarding personal saving is a key step in starting to address the culture of easy credit and consumer debt that has become prevalent and ultimately reduces the ability of individuals, couples and families to save."
He added: "We understand how hard it is for people to save a deposit for a home and similarly, how saving early for retirement can make a material difference to financial security in later life."
Earlier this year, the Treasury committee called for the Lifetime Isa to be abolished claiming it was too complex and not popular among savers.
But Mr Miller has previously said he hopes the government will continue the Lifetime Isa scheme, providing "consistent and long term" support to those who are saving for a home or planning for future retirement.
Personal finance expert Hannah Maundrell said: "The new cash Lifetime Isa from Newcastle Building Society will go up against only two other similar products but paves the way for a little more competition in the field with a market leading interest rate.
"They are currently not allowing customers to transfer their existing Isas in, although they plan to do so in the future which would offer more flexibility for those who have already started their savings pot.
"If you’re saving for your first home or retirement it’s a good option to consider as the government gives you a hefty bonus on top of your savings and you earn yearly interest. However, a Lifetime Isa isn’t for everyone and it’s unlikely to be for you unless you’re saving a deposit for a house or retirement as you’ll be charged 25 per cent on additional withdrawals making it a virtually pointless way to save."
rachel.addison@ft.com
