Martin Lewis issues urgent warning anyone aged 18 to 40 as government confirms LISA changes

If you're aged between 18 and 40, and don't have a Help To Buy ISA or a Lifetime ISA, Martin Lewis has a very important message for you.

The financial guru says anyone who doesn't have one of these accounts should open up a Lifetime ISA (LISA) straight away and place as little as £1.

It comes after the UK government confirmed it would be scrapping the Help To Buy ISA and LISA in favour of a new first time buyers' saving product, which has not yet been announced.

"We don't know quite what it is yet, my guess is that it will open in April 2028. It will be a relatively simple product where you save in it and you get a bonus," he told listeners of the Martin Lewis Podcast.

"And unlike the Lifetime ISA, you won't be able to save for your older age savings, once you're aged over 60."

You're probably wondering what the point is in setting up a LISA if these products are about to be binned by the government, but according to the money saving expert there are actually two important reasons.

"First of all, with the Lifetime ISA, in order to use it to get the 25 percent bonus, you can put up to £4,000 a year, so the bonus is £1,000 on that," Martin said.

"As a first time buyer on a property under £450,000, you have to have had it open for a year. So getting a pound in means it's open and then you have the facility available if you need it."

He continued: "So if in a year's time, you suddenly were in a position you could buy a house, you could dunk £4,000 in a Lifetime ISA and get the thousand pound bonus and use it then, because it's been open a year."

The second reason, he explained, is because the LISA can be used for retirement savings as well as purchasing a home.

Putting £1 in a LISA now could make all the difference (Getty Stock Images)

For the majority of people, the workplace pension is a more worthy means of saving for retirement as it means employers are contributing to it too.

"But the LISA can be a useful facility in some circumstances," Martin said. "So for the sake of a quid, putting a quid in, to give yourself the facility of having a Lifetime ISA to save for your retirement, if it becomes worthwhile in future, is a good idea."

He went on to say he doesn't know whether you will still be able to use the LISA to continue saving for retirement once the new saving product has been introduced, but it is still a possibility.

The replacement product is said to come into effect around April 2026, just in time for the new financial year.