Get paid £1,000 for saving: Lifetime ISAs
Lifetime ISAs were launched in April 2017 and a total of £1.25 bln were deposited in 2019-20 alone. Using a LISA one can buy a first home which cannot cost more than £450,00 but otherwise the savings cannot be touched until you are 60 or fall seriously ill. The big con however is the exit penalty. To open one, you must be aged 18 or over and under 40. You can deposit up to £4,000 each tax year and earn a 25 per cent bonus on contributions up to £1,000 a year. The £4,000 counts towards your annual £20,000 Isa allowance. To avoid forfeiting the ‘free money’ and losing some of your own savings, too, you must adhere to the government’s restrictions on how you spend your savings. In the last tax year, the Government banked £34 million in charges.
Do the benefits out way the negatives of the LISA?