Complete ISA Guide 2025 - Everything You need to know
Dr. Ndubuisi Egwim breaks down UK ISAs for doctors: the £20,000 annual allowance, Lifetime ISAs with a 25% government bonus up to £1,000 yearly, and a 25% penalty for withdrawals that don't qualify. Lifetime ISAs cap first-home purchases at £450,000.
Questions this video answers
£20,000 per tax year.
You can contribute up to £4,000 to a Lifetime ISA each tax year; the government pays a 25% bonus up to £1,000 per tax year.
You must be aged 18–39 to open a LISA. Once opened, you can contribute and receive the government bonus until age 50.
You can use a LISA to buy a first home valued at £450,000 or less.
A 25% withdrawal charge applies for non-qualifying withdrawals (i.e., not for first-home purchase or retirement after age 60).
Chapters
If I use my LISA account to buy my first home, as I use the government bonus for the deposit, am I required to pay back the bonus? Can I open a junior ISA account alongside my isa? The LISA bonus is a bonus. It's not a loan. You're not required to pay back the government. Can I open both a lifetime ISA and a stock and shares ISA in the same taxi? What are the penalties for withdrawing money from a lifetime ISA for purposes other than buying a house or retirement? Actually, you can open a junior ISA for a child under the age of 18 along alongside your own ISA account. I'm 41 years old now. Is there an age limit for opening a lifetime isa? Can I use a lifetime ISA to buy a second home if I already own a property. One thing that leads to doctors and dentists, healthcare professionals in general, making costly financial mistakes is confusion. Confusion about the financial system. And one big area of confusion is ISAs. So ISAs are individual saving accounts are really quite powerful too. They are. They are tax protected for savings and investments. However, a lot of doctors and healthcare professionals find themselves scratching their heads. And from the questions we get in our YouTube comments and blogs and emails, it means it's time to address them today. So today we are tackling your burning questions around ISAs. Want to simplify them, make it as simple as ABCD. So let's get ready for us to bust all the myths and clear the misconceptions and of course discuss how best to use ISAs to your benefit. Hello everyone and welcome back to Money Wise Doctor podcast. In case you are new here, I'm Dr. Andy Egwim, IMG, Dr. XLR, then HSGP and founder of Money Wise Doctor, a platform that helps doctors, dentists and healthcare professionals avoid costly financial mistakes and make the best decisions with their money. Today we are focusing on isa, specifically Lifetime isa, cash isa, stock and shares isa. So let's dive into our comprehensive Q A questions. What we're going to do today is that the questions I've gotten on the YouTube channel, some of you have responded to on the blog, these are questions that keep popping up. I'll read them to you and give you my best answer. So if you've got more questions around the ISA or things you want to know, feel free to pop them in the comment section of the YouTube or blog or even email us at and I will give you the best possible answer about it. Of course, feel free to get an opinion from a financial advisor. None of this is financial advice. It's just me sharing from my own experience and also from Deep Research. Now I'll start with the first question. So the first question is from Chi Chi asked, can I open both a lifetime ISA and a stock and shares ISA in the same taxi? The answer is yes. Of course you can open Both types of ISAs in the same tax. Here, however, you need to be mindful of the overall annual ISA contribution limit, which is £20,000 for the tax sale. Now, 2024, 2025 ELO asked, what are the benefits of a lifetime ISA compared to traditional savings account? Why can't I just save my money in a savings account? Well, a lifetime isa offers a 25% bonus up to a thousand pounds each tax year. This bonus can significantly boost savings for your first home or for retirement, making it more attractive option than a traditional savings account. Remember, it's tax free. Fumi asked, The 25% government bonus contributions made to Lifetime ISA. How does that work? Well, for every four pounds you contribute to a Lifetime ISA or Lisa, the government has a one pound bonus up to a maximum of 1,000 pounds for taxi. This is paid monthly into your LISA account. Dan asks, I'm 41 years old now. Is there an age limit for opening a lifetime Isa? Sorry Dan, you must be aged between 18 to 39 to open a Lisa. Once opened, you can continue to contribute and you get a government bonus up to the age of 50. But once you're above 40 you can't open one. ESN asks, Can I transfer funds from my stock and shares ISA to my lifetime isa? Yes, you can transfer funds from your stock and shares ISA to a lifetime isa. However, you should be aware of any fees or charges associated with this transfer. So check with your ISA provider to make sure you're not going to be billed quite heavily for doing this. Right. So next question. What are investment options available for stock and shares isa? Well, stock and shares ISA allows you to invest in a wide range of assets including individual stocks, bonds, mutual funds and of course ETFs which are quite popular, exchange traded funds and also investment trust. The specific options available depend on whatever platform or ISA provider you use. Now, Paul asked, can I use a lifetime ISA to buy a second home if I already own a property? The answer is no, you cannot use a lifetime ISA if you already own a property. You can use it to save or invest towards retirement, but they are specifically for first time buyers or retirement savings for individuals who have not previously owned the property. So if you own a property, you can use it to invest or save for retirement. So Barry asked What are the penalties for withdrawing money from a lifetime ISA for purposes other than buying a house or retirement? Well, do you want to find out? If you withdraw money from ELISA for any other reason other than buying your first home or for retirement after the age of 60, you will incur a massive 25% withdrawal charge which effectively cancels the government bonus and may even result in a loss of capital. Some platforms will charge a penalty also, Hannah asked, are the government bonuses for a lifetime ISA subject to income tax? Well Hannah, thankfully no. The government bonuses received for contributions to lifetime ISA are not subject to income tax. They are considered tax free incentives to encourage savings for retirement and of course for buying your first home. Next question Vera Can I use the funds from my lifetime ISA to invest in stock and shares isa? Actually yes, you can invest the funds within a lifetime ISA in stock and shares. Actually this is not financial advice, but if you already bought your first house and you are holding the lifetime ISA as just for retirement, it might be best to hold it in stock and shares rather than cash because it will give you the opportunity to beat inflation. But remember, there's always risk in investing. Now Rob asked, can a lifetime ISA be used for any other purpose besides buying a home or retirement? We already answered this one no, you cannot use your lifetime mindset to buy a new cow to travel on holidays and you can only use it for retirement or for buying your first house. Sorry about that. Jasmine asked, can my partner open a separate lifetime ISA if I already have one? Jasmine the answer is a resounding yes. The criteria is any adult that is between 18 to 39 years old in the UK. So if your partner falls into that category, hopefully they can open a separate Lisa so I'll give you a quick example. A colleague of mine and there are multiple examples like this. A colleague of mine, a GP registrar, Moneywise Doctor, said up to the maximum lifetime ISO of £4,000 for three years and got a thousand pounds each year total of £3,000 bonus. Her partner did the same and all together they had £30,000 between them. When you add the money they saved and the bonus and this funded part of the deposit for their lovely new home. Now if you are looking to buy your first home or remortgage, check the link in the description for a free step by step guide that will hold your hands and take you through the process of buying your first home to avoid any costly mistakes. Now let's jump to the next questions. Ali asked, what are the main differences between a cash ISA and a stock and shares isa. Well, there's quite a bit of difference actually. The primary difference is the investment strategy. Cash ISA just hold your cash deposits with interest. So it's quite low risk. Why stock and shares isa? You can invest it in a variety of assets like stocks and bonds and there's a potential for higher returns. But there's also potential. There's also risk as well. Jimmy for Life asks, can I open a junior ISA account alongside my isa? Yes, actually you can open a junior ISA for a child under the age of 18 alongside your own ISA account. However, your contributions to the junior ISA will not count towards your own £20,000 ISA allowance, which is good. User Row Something asked if one opened a lifetime ISA in August, when is the end of the year August, December or April? Well, that's a great question. The lifetime ISA operates in the UK based on the tax year basis. So the anniversary is not based on the anniversary of when you open it. In the UK, the tax year runs from April 6 to April 5. So if you open your ISA account, any of the ISAs in in August, it's going to be. You're going to have new ISA allowances by the next April. That's April 5th. I hope that's clear. So the tax year run from April to April, not from January to December. December. Right. There's more official Adenira asked, what if you already bought your first home? This keeps coming up. Is the lifetime ISA still a viable option? In my opinion I'll say yes because I bought my first home, I bought my second, but I still own the lifetime isa. I. I had the help to buy isa, but unfortunately my wife and I were not able to receive the bonus. This is part of the question because the value of the house was over 400,000 and it was outside London. However, I decided to keep account open because want to use it to save for the future. The interest is not high. Well, this is. Yeah, this is the truth about isa. Lifetime isa. Thank you for your question. Then the answer is yes, if you. If you're no longer a first time buyer, the lifetime ISA is still an option, but it's for investing and for saving for retirement. I agree with you. Is an extra way to save for your future. Well done. Now the next question is from can one withdraw money from a cash isa? Is there any time frame within which you cannot access the money? What's the frequency of the interest monthly or yearly? So this is triple barrel question. Well, that's a brilliant question and thank you for bringing that up. Yes, you can withdraw Money from a cash isa, usually without any penalty, although there might be specific terms depending on your platform or provider. So regarding assess time frames, typically there's no restriction on when you can withdraw money or funds from your cash isa. It's very different from a lifetime ISA where there is actually a penalty. As for the frequency of interest payment, it varies depending on the ISA provider and the type of account. Some may get pay interest monthly while others is best. Actually, it's best to check with your provider to get the terms and conditions. Now let's jump to the next question from Cheesy. So Cheesy asked for lifestyle. That's lifetime isa. I say UK homeowner, you if I open an account, will I be receiving the 25% government bonus till 50 years even if I stop paying? Well, the ages are clear. You can start paying if you're between 18 to 39, you can open it. You can pay all the way to your 50 years of age. So if you open, even if you open at 40, you can pay till you have 50 years. When you turn 50, you can't pay anymore. But the ISA account can stay open. The lifetime Isaac account can stay open. I can still get interest and returns on your investment. You can cash out when you're 60. Brenda asked, we are buying a house over £480,000. Can I use the Lifetime ISA? I'm sorry, Brenda, sadly, no. The lifetime ISA or LISA can only be used to purchase a first home that is valued at 450,000 or less. So if the property you're considering is above this price limit, you'll not be able to use the funds in the lifetime isa. Unfortunately, that seems unfair. I understand, but that's the rules. Kevin3055 asked, if I use my LISA account to buy my first home, as I use the government bonus for the deposit, am I required to pay back the bonus? The government. Okay, I understand. No, the LISA bonus is a bonus. It's not a loan. You're not required to pay back the government. The bonus. So is it's a bonus, it's not a loan. Millions. 88. Wow, what a name. Asked. Hi, can the lifetime ISA be used to buy a second home? If not, what can I use it to buy? Well, I'm not surprised. This question is coming from an account called Millions. Answer. Sorry, Millions. The lifetime ISA is only for buying your first home or for saving for retirement. So that question keeps coming. Now William asks, can I hold both a lifetime ISA and NHS pension simultaneously? Of course, yes, of course you can hold both the lifetime ISA and a workplace pension, even an sipp, that's a private pension. There are some differences, but you know, you have to look at them differently. We have a video, we've covered these things in details, but the key thing to consider is that it's essential that the individual benefits and limitations of each option when planning for your retirement, you are well aware of them and you know what you are locating. Charlotte asks, is there an age limit for opening the Junior isa? Yes, Charlotte. Junior ISA can only be open for children under the age of 18 by a parent or legal guidance. Once opened, the account remains active until the child reaches adulthood and then they have access to the account. So that's 18 years in the UK, they're going to get access to all that money. Daniel asked, can I transfer my stock and shares ISA to a different provider? The answer is a resounding yes, you can transfer your ISA to a different provider without affecting your allowance. So this process can even allow you to take advantage of better investment opportunities or products, or lower fees or offered by another provider. So there you have it. We've covered a wide range of questions about ISAs from Lifetime ISAs, Cash ISA stock and shares ISAs. We currently have about 100 videos, almost 100 videos now on YouTube channel, and we have a full ISA playlist. You can go into them, have a look, leave a comment if you have questions around these issues and I'm quite happy to come back and reply now. If you found this episode helpful, don't forget to subscribe to the channel. Subscribe and share it to your friends so that they don't miss out this useful information. Thanks for tuning in and until next time, take care and remain money wise.
