The first cash Lifetime Isa (LISA) has finally been launched months after it was snubbed by banks and building societies in April.
However, the investment vehicle could prove essential for self-employed GPs.
Introduced on 6 April, cash deposited into a LISA will receive a 25 per cent Government top up. The maximum deposit is £4,000 per year.
It can only be used by first-time buyers to fund a deposit for a property, or taken tax-free after the saver turns 60.
Savers who withdraw cash for any other purpose will be subject to a 25 per cent penalty – leaving them with less money than they initially deposited.
There are also age restrictions on who can open a LISA. Skipton Building Society, which launched the first cash variant of the LISA, says customers must be aged between 18 and 39.
Contributions towards a LISA will count towards the maximum amount an individual can deposit into any type of ISA each year – currently £20,000.
In theory, an individual who opens a Lifetime ISA at the age of 18 and deposits the maximum amount each year until they turn 60 will save a tidy £200,000 (including the £42,000 Government top-up).
Most major banks and building societies snubbed the LISA on launch, claiming the Government had not offered enough advice and support to consumers with risks that the account could be mis-sold.
Those considering engaging with any financial product mentioned in this article should always seek independent financial advice from a licensed financial advisor before making any financial decisions.