If you’re looking to buy a home in the next few years, you should listen to Martin Lewis’ lifetime ISA advice.
Yesterday, Money Saving Expert, founded by Martin Lewis, revealed why now is the ideal time to top up your Lifetime ISA. Next month marks the end of the tax year on the 5th April and the last chance to top up your Lifetime ISA.
According to the Money Saving Expert newsletter, now is the time top up your ISA to the maximum of £4,000, or miss losing out on £1,000 free cash.
Martin Lewis Lifetime ISA tip
‘First-time buyers, fill up your £4,000 lifetime ISA allowance now – if you don’t use it, you lose it,’ says the 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 last year.
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.
Get topping up that Lifetime ISA while you still have time!