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A new stocks and shares lifetime Isa has launched with one of the lowest platform fees on the market. With just a few weeks before the end of the 2019-20 tax year, should you invest?
Digital investing platform EQi, previously known as Selftrade, introduced the new account on 2 March 2020. It's the 11th stocks and shares lifetime Isa to launch since April 2017, and the 16th lifetime Isa option overall.
Lifetime Isas, which are designed for first-time buyers and those saving for retirement, offer an additional 25% government bonus on top of what you save - up to a maximum of £1,000 in each tax year.
If you're saving for retirement, you'll be able to access your money at 60, but is a lifetime Isa any match for a pension?
Here, Which? reveals what the EQi lifetime Isa offers, and weighs up which savings option could best fund your old age.
EQi is a digital investing platform, which also offers Sipps, stocks and shares Isas and dealing accounts.
New customers who open an EQi lifetime Isa will be given a complimentary dealing account.
Any Isa-eligible investments can be made with the lifetime Isa, including:
You can buy investments as a one-off, or set up regular investments.
EQi charges a market-leading custody or platform fee of 0.2% per annum (capped at £10 per quarter), and new customers get a 'payment holiday' for the first two months, where they won't have to pay this fee at all.
However, there are other fees to be aware of:
Existing customers with an EQi Isa, Sipp or dealing accounts won't have to pay the custody fee on a lifetime Isa.
You can see how these fees compare against other stocks and shares lifetime Isas in our lifetime Isa guide.
You can open the amount from £1, and subsequent deposits can be made as one-off payments or a direct debit.
Existing investments cannot be added, only cash. Therefore, any investments must be sold before the cash can be moved to the lifetime Isa account.
Only cash transfers can be made into an EQi lifetime Isa - that includes cash lifetime Isas, or stocks and shares lifetime Isas once all investments have been sold.
Other Isas, including cash and Help to Buy Isas, can also be transferred, as long as they do not exceed the maximum £4,000 annual lifetime Isa deposit allowance.
Find out more:how to transfer your cash Isa
If you're thinking of saving for retirement with a lifetime Isa, the stocks and shares options are better suited to long-term saving. Many accounts say they should be taken out for at least five years, so that any bumps in the stock market have more time to recover.
While any provision for funding your retirement is a good thing, how does the lifetime Isa measure up to more traditional pensions? We've looked into the pros and cons of both options.
The government has previously said that the lifetime Isa shouldn't be used as an alternative to a pension - particularly if you qualify for employer contributions - but as a supplement to it.
So maybe the answer is having a combination of both.
Find out more:lifetime Isa vs pension
Lifetime Isas launched in April 2017; they're tax-free savings products that can be opened by anyone aged 18-39.
There are both cash and stocks & shares options, and anything you save gets an additional 25% government bonus, which is paid monthly (although it was paid annually until April 2018).
You can pay in up to £4,000 a year, meaning you could get up to £1,000 in government bonuses - in addition to any interest. Lifetime Isa deposits will be taken out of your overall Isa allowance.
You can only use the cash on certain things. First-time buyers can use the money to buy their first home, but the property must be in the UK and cost up to £450,000.
Alternatively, you must wait until you turn 60 to withdraw the cash. At this time, you can spend it however you like.