Paragon Bank has launched a new Cash Lifetime ISA (LISA) to introduce new competition to the LISA market.

Paragon announced their new LISA can be opened by anyone between the ages of 18 and 39 – allowing customers to save up to £4,000 a year tax-free and receive a 25% government bonus until they turn 50.

If savers are willing to lock their cash up for longer, Paragon said they can earn more – as funds cannot be withdrawn without being subject to a 25% government charge, unless they are to be used for the purchase of a first home, or for retirement.

If used for retirement, the funds can be withdrawn free of charge once the account holder reaches the age of 60, however the savings will stop earning the 25% government bonus and cannot be added to after the account holder has turned 50.

Paragon savings director, Derek Sprawling, commented: “The LISA is a fantastic opportunity for savers to earn a considerable amount of money on their savings towards their first home or retirement.

“If you save the maximum amount into a LISA every year between 18 and 50, you will have earned a £32,000 government bonus alone.

“The imminent end of the Help to Buy ISA should increase the appeal of the LISA scheme.”

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