Martin Lewis shares with potential homeowners how to get £1,000 per year buying your own home.
The money-saving guru has moved to tiktok To explain how first time buyers can get free money through Lifetime ISA (LISA) savings account.
In the MoneySavingExpert weekly newsletter, he explains how a LISA savings account can give your home-shopping pot a first boost.
In his latest reminder though, Martin opened the 41-second video by saying: “If you never have a home, put a quid in the Lifetime ISA.”
The Specialized Savings Account allows you to get a 25% bonus from the government on any money you keep for a first home or retirement.
Martin further explains in the video that if you put £4,000 into the account (the maximum amount allowed each year), you will be given £1,000 for your first house.
However, you can add anything from £1 to the maximum amount in the account, and add 25% of that amount after 12 months.
But you have to open the account for one year before getting the bonus.
You can open LISA only if you are between 18 to 39 years of age.
In the informative TikTok Martin says: “If you put down a pound now, even if you’re not thinking about buying a home yet, once you’re ready to buy, you can get the bonus right away. will be able to.”
Money in a savings account can only be used on your first estate or on your retirement.
If you use the money for something else, there is a penalty of 25 percent of the amount withdrawn.
However, there are other benefits to opening an account, as you earn tax-free interest on whatever you save as well as receive bonuses.
The bonus is paid every year you save something in a savings account, and will continue until you reach the age of 50.
So you could get up to £33,000 if you opened an account at age 18 and continued to add to your savings until that age.
Like other forms of individual savings accounts (ISAs), LISAs come in two forms, the cash LISA and the stock and share LISA.
You have to keep in mind that what you choose to take in the form of stocks and shares can be risky and your invested money can go up or down, whereas cash LISA will only keep what you put in it.
Martin Lewis’ money saving specialist Tends to advise parents and grandparents to help their children and grandparents buy homes, give them cash in gifts or financial aid.
This is because this cash can be contributed to LISA, although people under the age of 39 will need to open an LISA account themselves to receive Kwid.
There are other things to keep in mind that savings experts point out, including that you would need to purchase a property that costs £450,000 or less to qualify for the bonus.
You also may not be a cash buyer and the mortgage may not be a buy-to-let deal.
Also, if you are withdrawing money for your retirement, you can withdraw cash from the savings account only after reaching the age of 60 years.
They also remind savers that when they are ready to buy, they should ask their LISA provider to transfer the cash directly to the Conveyor/Solicitor.
Do not transfer it to you as if you withdraw it to an account in your name, you will pay a 25% withdrawal fee.
MSE also states in their guide that even if your purchase ends, you will not miss out and the funds will go directly back to the LISA account they came from.
Martin isn’t the first to tell savers how far they can get away with a savings account as an investment platform, with AJ Bell revealing that some Brits have raised their retirement funds to £40,000.
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