To help investors withdraw funds from their Lifetime ISA during the coronavirus pandemic the withdrawal charge has been temporarily reduced from 25% to 20%.
The reduced withdrawal charge applies to all unauthorised withdrawals.
This change applies from Friday 6 March 2020 until 11:59pm Monday 5 April 2021. A withdrawal charge does not apply when a withdrawal is made to buy a first home or the investor has a terminal illness.
This means that Lifetime ISA investors will only lose the government bonus earned on the amount they withdraw.
The temporary reduction of the LISA withdrawal charge to 20% will end on 5 April 2021.
On 6 April 2021, the Lifetime ISA withdrawal charge will go back to 25%.
Find out more Here.