A Month Left For First Time Buyers To Open A Help To Buy ISA Following Warning From Martin Lewis
There is little more than a month left for first time buyers to open a Help to Buy ISA, so you better move quickly to get your hands on some much-needed cash.
Earlier this month, Money Saving Expert Martin Lewis warned Brits to move fast to avoid missing out on thousands of pounds' worth of help towards a deposit from the government.
The government scheme allows people who have never owned a house before, to save money and receive a 25 percent bonus on top of what they put away.
But with the scheme coming to an end on 30 November, time is running out. It will then be replaced by a Lifetime ISA (LISA), for people aged between 18 and 39 to save for a home or retirement.
So what is a Help to Buy ISA?
Well, it's a scheme which allows people to put money away to be used on their first home. Whatever is saved will receive a 25 percent boost from the government - with a maximum total top-up of £3,000.
And if that's not good enough, you also earn interest on whatever you save yourself - but you need to shop around because the rates vary from bank to bank.
In the first month, you can deposit up to £1,200, with a maximum of £200 every month after. The good thing is that if you haven't got that kind of cash to put away in the first month, you can open one with just £1.
However, the government will only start topping up your savings after you have saved at least £1,600.
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And the money you put away can only be used on a house up to the value of £250,000, or £450,000 in London.
And, what's the Lifetime ISA (LISA)?
This has been around since 2017 and helps you to save up for your first home or your retirement.
Like Help to Buy, this one offers a government top-up of 25 percent, though you can save up to £4,000 per year - either as a lump sum or as and when you can - which will give you a £1,000 bonus.
To qualify for the LISA, you must be aged between 18 and 39, however, once you're signed up you can deposit in it until you are 50.
The money can be used for a first home up to the value of £450,000 - once you have had an account for at least 12 months - or towards the cost of retirement past the age of 60.
Speaking on This Morning earlier this year, Martin Lewis said both are good options, but which one you choose depends on your personal circumstances.
He said: "The easiest and simplest form of help is something called a Help To Buy ISA. But it closes to new applicants on the 30 November. However, if you open one beforehand, even with just a quid, then it continues working for a decade and you can put money in and get the bonus, so many people should think about putting the quid in.
"The difficultly is, there is another product Lifetime ISA or LISA, that also gives the bonus. Now you can have both, but you'll only get the bonus on one of them, so you need to choose and the choice is complex.
"They're a great way to save for older children. If your kids are 16 and over for a Help to Buy ISA, or 18 and over for a LISA, the bonus means these are a great place to give them money to save in. If you have it."
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