Saving for your first home?
If you want to grab a tax-free bonus in this financial year you'll need to open a Lifetime ISA before April 6th. This is a new scheme where, if you can save up to £4,000 per year towards funding your first home, the Government will add a further 25% of the amount you have paid as an annual bonus. That means if you pay in the maximum amount of £4,000 in a year, you’ll receive a tax-free bonus of £1,000 that year. The £4,000 is included as part of your overall annual ISA allowance, currently £20,000.
The scheme is only open to people aged between 18 and 39 and as long as you open the Lifetime ISA before you are 40, you can keep contributing until you are 50.
The money and invested bonuses can then withdrawn without penalty in the following circumstances:
- To help buy a first home worth up to £450,000 at any time from 12 months after you first save into the account
- If you become terminally ill
- From the age of 60
If you withdraw the money for any other reason, you will need to repay the bonuses that you have received.
For full details, we suggest that you contact your bank or financial advisor.