Martin Lewis has warned that there are only a few days left to get a free £1,000 from the government. The Money Saving Expert has urged anyone with savings to act fast before the current tax year ends to be able to secure the free sum.
Anyone who has an Lifetime ISA account can put away £4,000 per year and the government will give you a 25% bonus on top of the cash you save. This means you can get £1,000 free from the government each tax year – or £2,000 free if you’re in a couple and you both have a LISA account that you max out.
But Martin has warned savers that time is running out, as they must ‘use of lose’ their LISA allowances before the end of the tax year, which ends on April 5.
This means you need to transfer any money over to your LISA account before April 6, the new tax year, to get any bonus payment from the government, reports The Mirror.
“While cash ISAs aren’t much cop for most, other ISAs can be. If you’re a first-time buyer, check out the Lifetime ISA’s 25% boost worth up to £1,000/year on your first home,” said Martin in the latest MoneySavingExpert email.
Lifetime ISAs can be opened by any UK residents aged between 18 and 39. The money saved can be used to put a deposit toward your first home or for retirement.
If you take out your money for anything other than these reasons, you’ll lose your bonus and pay a 25% penalty, which works out at around a 6% loss.
Keep in mind that however much you put away in a LISA will count towards your overall yearly £20,000 ISA allowance. But if you’re saving for your first home, you won’t find a regular savings account from a bank or lender that pays 25% interest.
If you can afford to lock your money away for a whole year, Shawbrook Bank is the top player paying 1.6% – but you have to put in at least £1,000.
JN Bank will offer you 1.96% with its two-year fixed account if you pay in a minimum of £1,000, or the best five-year fix is from Monument with 2.4%.
In comparison, the best easy-access cash ISA is from Paragon and pays 0.8%, while the one-year fixed cash ISA from OakNorth Bank offers 1.28% interest and a two-year from UBL UK pays 1.6%