Martin Lewis has issued some urgent advice around one government savings product, explaining that there are certain people who should try open it as soon as possible while others might not need to bother with it at all
Martin Lewis has highlighted the downsides of a Lifetime ISA including a 25 per cent 'penalty' for taking the money out - and for anyone buying a house under £450,000. These products are only available to people between the ages of 18 and 40 and offer some of the same benefits as normal ISAs such as a stock and shares or cash options and the tax-efficiency aspect.
One of the biggest caveats to this product is that Brits can only withdraw their money to buy their first home or for retirement purposes once they reach an appropriate age. The Money-Saving Expert warned that this limitation could make it more of a money-drainer than saver for some people. While these restrictions encourage people to use the account for the exact reasons it was made, Martin highlighted one issue that has slipped through the cracks; first-time buyers can only get their bonus if the house they’re buying is under £450,000, a limit set in 2016 that hasn’t been raised since. The expert explained: “Many people especially in London, the South East and other metropolitan areas have been priced out.
One caller, Sharon, a 20-year-old university student who has plans to buy a house in London around the time she turns 30, asked if it would be worth maxing out a LISA this tax year. Martin encouraged her to open the account with just £1 but “wait until the budget” in October before adding anymore in.
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