The details of Lifetime ISAs and how to apply
During a recent episode of The Martin Lewis Podcast, Martin Lewis, the Money Saving Expert, discussed the benefits of Lifetime ISAs (LISAs) and who is eligible to apply. He emphasized the importance of starting a LISA by urging everyone to put in £1 today.
Why LISAs are the best savings option for first-time homebuyers
According to Lewis, Lifetime ISAs are the best savings option for anyone who wants to buy their first home. The state adds money to your deposit, making it a tax-free savings or investment account for individuals aged 18 to 39 who don't own a home.
The "need to knows" about LISA money
Lewis highlighted some key points about LISA money. Users receive a 25% bonus on their LISA contributions, with a maximum contribution of £4,000 per tax year until the age of 50. Even a contribution of £1,000 can result in a bonus of £1,250, which can be put towards a deposit. However, the price of the first residential home is capped at £450,000.
A reminder to put in just £1 today
Lewis's main message was for individuals aged 18 to 39 in the UK who have never bought a house and don't have a LISA to put in just £1 today. The LISA must be open for at least a year before funds can be withdrawn.
Penalty fees and other considerations
If funds are withdrawn from the LISA for anything other than buying a first home, a penalty fee of 6.25% is applied. However, once account holders turn 50, they can remove funds without penalty. Additionally, two first-time buyers can use their LISAs together towards a property, and even if a first-time buyer is purchasing a home with someone who is not, they can still use their LISA in certain circumstances.
Other money-saving tips from Martin Lewis
In addition to discussing LISAs, Martin Lewis also shared a trick to receive £500 from energy companies and provided advice on becoming debt-free faster using 0% balance transfer cards. He also offered tips on how to reduce compulsive spending and save money.
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