Our favourite Money Saving Expert was back on TV on Friday morning – and he had some interesting news for first-time buyers.
During his regular money-saving slot on This Morning, Martin Lewis revealed there’s a new Lifetime ISA in town. And its unbeatable rate will help anyone saving for a deposit raise even more precious cash.
‘There’s a new top lifetime ISA, or ‘LISA’,’ says Martin, before going on to explain why you should get one. ‘For every £100 you save in a LISA, first-time buyers get a 25 per cent boost towards their deposit.’
Lifetime ISAs (Individual Savings Account) were introduced in April 2017 by the Government for two exclusive uses. Either to buy your first home or to save for later life. You have to be 18 or over but under 40 to open a Lifetime ISA, and you can contribute to it until you’re 50. It’s then possible to withdraw the money when you’re buying your first home or you reach 60.
‘You can save up to £4,000 a year so that’s a bonus of £1,000 a year on top if you do,’ Martin continues. ‘The previous top payer was 1.1 per cent but now Moneybox is paying 1.4 per cent. The underlying bank, by the way, is OakNorth Bank.’
For more top tips on home finance, visit our property advice section
Martin tells us that you can either open a brand-new Lifetime ISA account with MoneyBox, or transfer an existing ‘LISA’ into it. And he has another tip if you’re planning to transfer your existing ISA. ‘Don’t withdraw the cash – ask MoneyBox to do the transfer for you,’ Martin says.
You might also have some decisions to make if you already have a Help to Buy ISA. ‘Whether a LISA beats a Help to Buy ISA – which also attracts a 25 per cent bonus – is complicated and depends on your circumstances,’ says Martin. ‘So do your reading first.’ We suggest you check out Money Saving Expert’s Lifetime ISAs guide for starters.
We’ll be keeping our ears to the ground for more tips from Martin, so watch this space!