Nutmeg Lifetime ISA review: Over 8% annual returns

I’ve held my Nutmeg Lifetime ISA since 2018. But the question on everybody’s lips is… how has it performed for me in that time?

Well, let’s see why this is an account I’m more than happy with.

Why I Opened a LISA

Planning for retirement has always been important to me. I joined the civil service at 22—not because I had a burning passion for it, but for the pension. Probably not the wisest reason, but hey, it’s worked out alright so far.

So when I first heard about the government’s plan for a Lifetime ISA, I got pretty excited. Within a year, I had one set up.

Why Nutmeg?

Honestly, it’s been a while and I don’t remember every reason I chose Nutmeg. But back then, there weren’t many providers offering a stocks and shares LISA. Nutmeg had decent fees, solid reviews, and a simple setup process—so I went with them.

Why Not Just Use My Pension?

Some people prefer to keep all their retirement savings in one place, but I’m not a fan of putting all my eggs in one basket.

With pensions, your money is locked away until a set age. A LISA, on the other hand, gives me the option to access the funds earlier if I need to—yes, with a penalty, but at least the option exists.

If I were a higher-rate taxpayer, maybe I’d lean harder into my pension. But I’m not, so a LISA works for me.

My Saving Habits

I put away £100 a month via direct debit. When March rolls around, I see if I can scrape together enough to max out the annual limit. Some years I manage it; others, not even close.

Performance So Far

As of this year, my LISA balance sits at £30,191. According to Nutmeg, that’s a simple return of 18.76%.

Sure, spread over 7 years, that doesn’t sound mind-blowing (just 2.68% annually). But most of my contributions were made in more recent years.

Here’s the kicker: my actual contributions total £19,065. So that £30,191 figure represents a 58.4% increase overall. Calculated as an annual return, that’s around 8.3% per year—not too shabby.

Fees

Nutmeg’s fees are based on your portfolio size. So far, I’ve paid £373.82. It might sound like a lot, but given the performance, I think it’s fair value. Plus, fees are taken from the balance—not my bank account—so I don’t even feel the pinch.

Looking Ahead

Nutmeg offers a prediction tool. Right now, it estimates my pot could be worth around £111,000 by 2047.

Nice to look at—but not that helpful. I plan to access the money in 2040 when I turn 60. And since the government bonus stops at age 50, I’ll stop contributing then too.

Final Thoughts

After seven years with Nutmeg, I’m genuinely pleased with how my LISA has performed. The returns have exceeded my expectations, the platform is easy to use, and the fees feel fair. It’s not my only retirement savings vehicle, but it’s proven to be a solid one.

If you’re a basic-rate taxpayer like me and looking for a flexible retirement savings option—with the added bonus of a government top-up—it’s definitely worth considering. Just don’t expect miracles overnight. Like all investments, it’s a long game.

Nutmeg

Or, take a look at more detail about the Lifetime ISA. But if you don’t think you’re ready to open a Lifetime ISA, but still want to invest, take a look at how my investment with Plum rose by over 35%.

Please note that the above is for information purposes only and does not constitute as financial advice. Investments can go down as well as up.