Lifetime ISAs are designed for savers investing for their first home or for their retirement.
There is a limit of £4,000 per tax year, but the government adds 25% to the amount automatically.
Last Updated: January 2021
Not many firms offer Lifetime ISAs. Most of those that do operate in a similar way as a traditional Stocks and Shares ISA, leaving it to you to choose your own investment options and funds.
Have a look at our Fund Finder to see what ethical fund options there are for you to invest in.
There are also three Lifetime ISA providers- AJ Bell, Nutmeg and OneFamily, which offer model ethical investment portfolios, if you'd rather not choose your own investment funds.
Recently launched portfolio with a focus on globally diversified equity ETFs
AJ Bell have recently launched their model ethical fund-of-funds portfolio, which uses passive ethical ETFs to create a globally diversified and largely equity focused portfolio.
While it has only recently launched, the funds within the portfolio are well established and have been operating for a number of years.
- Good for those looking for a medium-high risk, globally diversified portfolio managed on your behalf
- Overall low cost for those conscious of fees, with the portfolio fee capped at 1%
- Has only recently launched so very limited track record
- The fund only uses low cost ETFs, so the 1% portfolio fee is actually quite high
Risk Profile: Balanced - Growth (medium/ high risk)
Performance: n/a (too early to tell)
Launch Date: 23 Nov 2020
Number of funds: 12
Active or Passive?: Passive
Platform fee: 0.25% pa
Portfolio fee: 1% p/a (capped)
Fee on a £10,000 portfolio: £125 p/a
Minimum Investment: £500
Uses passive ETFs to build an ethical fund, with 10 portfolios to choose from based on your risk profile
Nutmeg is one of the largest and best-known roboadvisors in the UK. You input your risk level (from 1 (very low) to 10 (very high), and Nutmeg builds a diversified portfolio of passive ethical ETFs based on your profile, which they then monitor and manage on your behalf.
- Plenty of options to customise the portfolio based on your risk appetite
- Cost-conscious option, with platform fees falling to 0.35% after £100,000
- Not all of the investments within the portfolios have a dedicated ethical focus
Risk Profile: 10 risk levels to choose, from low to high
Performance: For Mid Risk: +7.7% in 2020; +13.8% since launch (to 30 Nov 2020)
For High Risk: +9.4% in 2020; +18.4% since launch
Launch Date: 30 Sep 2018
Number of funds: 14 in total
Active or Passive?: Passive
Platform fee: up to 0.75% pa
Portfolio fee: Average 0.31% p/a
Fee on a £10,000 portfolio: £106 p/a
Minimum Investment: £100
A choice of two ethically-focused funds, one with a moderate risk profile and one higher
OneFamily offers two options for a model LISA- one with a moderate risk profile, and one with a higher risk profile. The higher risk profile fund aims to invest into companies focusing on climate solutions, while the moderate risk fund is split between this strategy and traditional fixed income. These are both actively managed portfolios.
- The OneFamily platform offers a wide variety of financial products for families, from Junior ISAs and child trusts, to life cover
- Two options to invest into depending on risk profile
- Laggard performance of both funds since inception, with a fairly limited track record
Risk Profile: 2 options- Moderate and Higher risk
Performance: Higher Risk:-7.7% in 2020;
Moderate Risk:+2.6% in 2020
Launch Date: January 2018
Number of funds: 2
Active or Passive?: Active
Total fee: c.1.16% pa
Fee on a £10,000 portfolio: £116 p/a
Minimum Investment: £250
The OneFamily Lifetime ISA has two options to invest into. Click here for the in depth booklet on the LISA account, and the two funds that you can invest into are outlined below:
Higher Risk: OneFamily Global Equity Fund
Moderate Risk: OneFamily Global Mixed Investment Fund