What was the first-time buyers scheme they showed on 'Location, Location, Location'?
Lifetime ISAs (LISAs) are a great way to save to buy your first home. You might have seen them talked about recently on Channel 4’s property searching programme, 'Location, Location, Location'.
The lifetime ISA scheme, which the show referred to as “First Time buyers scheme”, was set up by the UK government to give first-time buyers a financial boost when they’re saving for a house deposit.
Here’s how lifetime ISAs work.
Every time you pay into a lifetime ISA (LISA), the government pays in too
You heard Kirstie and Phil right – the more you pay in, the more help you’ll get. The government tops up everything you pay in by 25%, so every £1 you put in becomes £1.25.
£100 becomes £125.
£1,000 becomes £1,250.
You get the picture!
Are there any catches with lifetime ISAs (LISAs)?
As long as you’re a UK resident and you’ve never owned your own home, you can use a lifetime ISA to save for a mortgage deposit.
However, to stop people claiming the bonus without using it for their first home, there is a withdrawal fee that you’ll be charged if you take money out for anything else. Unless you’re over 60, when you can take money out for anything you like without paying a withdrawal fee (making it also a good option for people saving long-term).
You’ll also be charged a withdrawal fee if:
- You withdraw money within the first 12 months of the date your start paying into your LISA
- The property you buy isn’t for you to live in (eg if you’re buying a commercial property or property you plan to let out)
- The house costs more than £450,000
You should also be aware that you are limited to paying in £4,000 or less each tax year. If you plan to save more than this, you could use an ISA to save at the same time.
You must be an adult under 40 to open a lifetime ISA. After you turn 50, you’re not allowed to pay any more in but you can leave your LISA open.
How do I open a lifetime ISA (LISA)?
You’ve come to the right place. At OneFamily, we offer a stocks and shares lifetime ISA which invests your money on your behalf in one of two ready-made funds – one slightly riskier than the other.
Other providers also offer lifetime ISAs, but ours stands out as one that’s simple to use and comes with a low minimum investment of just £25 a month.
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