Money Saving Expert has shared how first time buyers can get up to £1,000 a year with a particular type of savings account.
Even if you’re not thinking about buying yet, it’s well worth taking steps to ensure you get more for your money later on.
The finance website is urging everyone aged 18 to 39 to open a Lifetime ISA (LISA) now, even if you only deposit £1.
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Savers will get a 25% bonus from the state on everything they put in before they turn 50.
You can put up to £4,000 in per tax year. The 25% bonus means if you save £1,000 you would end up with £1,250 – while the full £4,000 will turn into £5,000.
There is a limit of £4,000 on what savers can put in their LISA, which can be paid in a lump sum or by putting in cash when you can.
The 25% bonus on this maximum £4,000 saved per year would be £1,000.
The money from the LISA can then be used on your first residential home – costing up to £450,000.
It is important to note the LISA must have been open for at least a year for you to be eligible for any bonuses, with MSE urging all who can to open one now with £1 to get the clock started – just in case.
It’s still doable even if you’re buying with someone who isn’t a first-time buyer.
It’s an individual product, so first-time buyers can still use it, regardless of who they buy with.
Equally, if both are first-time buyers, you can have one each.
If you withdraw the money before you turn 60, however, there’s effectively a 6.25% penalty if you’re not buying a home.
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