If you are looking to buy your first home and require a healthy deposit then a Lifetime ISA (LISA) could help you to get onto the property ladder. With a government contribution of 25pc you could earn up to £1000 a year on savings of £4000 a year.
There are certain criteria required to qualify for this scheme:
When buying property you can either withdraw the full amount or keep some back as a nest egg at 60.
If you wish to club together with friends to buy a house, you are able to pull your LISA’s together to afford a larger, more expensive house. Your bonus will be available to you on exchange of contracts. You can then use your money to pay the deposit on the property.
You don’t have to use your LISA to buy a house, it can be used for your retirement at 60. This is attractive to those that run their own business and have missed out on company pension plans.
When you turn 50 you wont be able to pay into the Lifetime ISA, the government contributions of 25pc will also stop. It will however continue to earn interest until your withdraw. Penalties of 25pc are taken by the government if you exit for anything other than buying your first property or your retirement.