Martin Lewis explains how saving just £1 can help you buy your first home
Martin Lewis has explained how saving just £1 could help you buy your first home.
The MoneySavingExpert.com founder urged anyone thinking about getting on the property ladder to open a Lifetime ISA (LISA).
With a LISA account, you can save up to £4,000 each tax year and you then get a free 25% cash boost from the Government.
This means the maximum bonus you can pocket each tax year is £1,000.
Anyone who is aged 18 to 39 can open a Lifetime ISA for free - and if you're in a couple, you can open one each.
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You can keep paying into a LISA beyond the age of 50.
However, your account needs to be open for one year to use it - and you can only use a LISA for your first property or retirement.
You'll pay a penalty and lose your bonus if you take money out for any other reason.
The penalty you'll pay is 25% on any money you withdraw.
If you're saving for your first home, the value of the property you're planning on buying cannot exceed £450,000.
Writing in the latest MoneySavingExpert.com email, Martin said: “Put at least £1 in a LISA asap for a big savings boost. I love this trick.
“Those aged 18 to 39 can open a top Lifetime ISA and the state adds 25% on top of up to £4,000/yr saving (so £1,000/yr free) to a first-time buyer deposit, on a home costing under £450,000.
“As it has to be open a year to get this, pop a quid in now to start the clock ticking, then when you're ready to save, put cash in so you're eligible for bonuses quicker.”
Martin also shared an email from an MSE reader who explained how they made an extra £11,000 by using a LISA.
The reader, known only as Olly, said: "My girlfriend and I have just completed on our first house. I'd maxed out the LISA allowance every year for 6 years and my girlfriend 5, so we received an extra £11,000 towards our deposit!
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“Without this we wouldn't be able to afford it! Thanks Martin & team."
You can read more about other help available to first-time buyers here.
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