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People Have Two Days Left To Get £1000 Free From The Government

People Have Two Days Left To Get £1000 Free From The Government

You can claim £1,000 from the government if you sign up for a Lifetime ISA before 6 April.

Shola Lee

Shola Lee

People can potentially get up to £1,000 free from the government if they sign up to a Lifetime Individual Savings Account (LISA) before 6 April.

If you sign up before the start of the new tax year, you can get a LISA, which will let you deposit up to £4,000 a year, tax-free.

In addition, the government will add a 25 percent bonus to savings, which is up to a maximum of £1,000 per year.

However, if you sign up after 6 April, you'll miss out on that bonus for this year.

Even if you're not sure whether you'll use the ISA, you can put in just £1 to keep it open.

There's only a few days left to sign up for a Lifetime ISA.
Alamy

To open one, you need to be between the ages of 18-39 and you can only use the government top up to either go towards your first home or for retirement.

A penalty will be charged for withdrawing funds from the LISA for any reason other than these two reasons, however.

As Martin Lewis' Money Saving Expert website notes: "Under the normal LISA rules, you can take some or all of your cash out of a LISA before age 60 even if you're not buying a property – but you're charged 25 percent of the amount withdrawn".

Still, the LISA is a great way to save, but you'll only get the bonus on what you contribute.

The Money Saving Expert website then goes on to break down the ins and outs of the LISA.

It explains: "The Lifetime ISA is, well, an ISA – an individual savings account – which is a place to save where the interest you make is tax-free."

Martin Lewis, the Money Saving Expert, has listed the ins and outs of a LISA.
Alamy

"The maximum bonus is £33,000 if you open it at 18, and max it out until you hit 50 (unless you're born on 6 April, when the max is £32,000)."

You may be wondering whether you can transfer funds from an existing ISA, like a Help to Buy, to a LISA.

"If you already have an ISA, some providers let you transfer money from that into your Lifetime ISA (even if your other ISA isn't a Lifetime ISA). Even then though, you can only transfer £4,000 from other ISAs into the LISA in any one tax year (this includes Help to Buy ISAs)", the money savings experts said.

The top-up bonus provided by a LISA is likely to be a welcome amount for many in the UK as people across the nation saw a steep increase in energy bills on 1 April.

With Lewis warning that many could expect an estimate of about '£1300 a year going up in bills'.

Featured Image Credit: Alamy

Topics: Money, Martin Lewis, UK News