The Lifetime ISA will be available from April 2017 to anyone under the age of 40.

They will be able to save up to £4,000 each tax year into a Lifetime ISA and receive a government bonus of 25%. That means people who save the maximum each year will receive a £1,000 bonus each tax year from the government.

Announcing the plans in his Budget speech, Osborne said: “You don’t have to choose between saving for your first home, or saving for your retirement. With the new Lifetime ISA the government is giving you money to do both.”

Osborne also announced that the tax-free ISA allowance will rise from £15,240 to £20,000 in April 2017.

Here are all the details about the Lifetime ISA:

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Lifetime ISAs are aimed at young people

You will be able to open a Lifetime ISA account from the age of 18 until you turn 40. You will receive a government bonus on contributions until you reach 50.

You can save as much as you want

There is no maximum monthly contribution. You can save as little or as much as you want each month as long as you don’t exceed the £4,000 a year limit.

Savings must be used to buy your first home or for your retirement

Your savings and bonus can only be used to buy your first home which must be located in the UK and cost no more than £450,000. The money can be used at any time from 12 months after opening the account. Accounts are limited to one per person rather than one per household so if you’re buying with a partner or friend, you can both receive a bonus.

If you don’t use all the savings for your first home, you won’t be able to withdraw the remaining balance tax-free until you reach 60. At this point, the savings can be used for any purpose. You can withdraw the money at any time before you turn 60, but you’ll lose the government bonus and any interest or growth on it, and you’ll also have to pay a 5% tax charge.

Opening a Lifetime ISA will be the same as opening a regular ISA

You’ll be able to open a Lifetime Allowance via a bank, building society or investment platform or manager.

You can have a Lifetime ISA in addition to other ISAs

You’ll be able to contribute to one Lifetime ISA in each tax year as well as a cash ISA, a stocks and shares ISA and Innovative Finance ISA as long as you don’t exceed the new overall ISA limit of £20,000 from April 2017.

Bonuses will be paid annually

In the 2017/18 tax year, the government bonus will be added at the end of that tax year, but from 2018/19, the bonus will be paid on a monthly basis.

You can have a Lifetime ISA and Help to Buy ISA

You can have both types of ISA but you’ll only be able to use the government bonus from one of the accounts to buy your first home.

For example, if you use your Help to Buy ISA with its government bonus to buy your first home, you’ll have to save the Lifetime ISA with the bonus for your retirement.