Whether you are thinking of buying a house now, or expect to buy one in the future, Martin Lewis’ lifetime ISA tip means you could get your hands on £1000 free cash using just £1.
In Martin Lewis’ new Tik Tok series for 18-35 years old, he told any first-time homebuyers that they need to open a Lifetime ISA with just a quid.
‘If you’ve never owned a house put a quid in a Lifetime ISA, why because it gets the clock ticking,’ explained the Money Saving Expert about his property advice.
Image credit: Lizzie Orme
‘The Lifetime ISA is a saving product you can put up to £4000 a year in, when you do the state puts 25 per cent in on top of that. So when you put £4000 a year in it they’ll put £1000 towards your first home,’ he adds.
You might be wondering why the need for the £1, well according to Martin Lewis it is all about making sure your account has been open long enough to benefit from the bonus. Without it could delay you snapping up the £1000 by a year.
‘You have to have it open for a year before you get the bonus,’ he explains. ‘So if you put a £1 in now, even if you’re not thinking of buying a house yet, then once you are ready to buy you’d be able to get the bonus instantly.
If you already have an active Lifetime ISA and a looking to buy a home soon, Martin Lewis top tip is to make sure you top it up to the maximum £4,000 by the end of the tax year to snap up £1,000 free cash.
Image credit: Lizzie Orme
‘First-time buyers, fill up your £4,000 lifetime ISA allowance now – if you don’t use it, you lose it,’ says Martin Lewis in the Money Saving Expert newsletter. ‘A lifetime ISA can be opened by those aged 18-39 and gives first-time buyers using it towards a home a 25 per cent bonus on everything they manage to save. Capped at £1,000 per tax year.’
‘You can put in up to £4,000 per tax year, which means you’ve until 5th April (you can put in another £4,000 the next day),’ it explains. ‘So if you can max it out, do.’
The Lifetime ISA was introduced in April 2017. It replaced the Help to Buy ISA that was phased out in November 2020.
Image credit: Lizzie Orme
It allows first-time buyers to save £4,000 a year, double what you could save with Help to Buy. Each year, if you can save up to that amount, you can receive £1,000 of free cash annually. What’s more, you also earn interest on whatever you save, which is tax-free.
However, if you decide to withdraw the cash and not use it for a first home or retirement, you’ll have to pay a penalty.
If you haven’t opened a LISA yet, but are thinking about it, the Moneybox Lifetime ISA offers the top cash LISA rate. However, you will need to open and manage the account in Moneybox’s app.
If you have that £1 start looking for the best LISA deal for you.
The post Martin Lewis reveals why you should open a Lifetime ISA with just £1 appeared first on Ideal Home.
