Money expert Martin Lewis is urging people to put £1 in an account now to get access to a free £1,000 bonus from the government every year until you turn 50.
Martin returned on ITV1 and ITVX on Tuesday, September 30 with a special edition of his hit programme, The Martin Lewis Money Show Live. There, Martin urged people aged over 18 to put £1 into a Moneybox account, which is currently the top-paying Lifetime ISA account, offering a 4.35% interest rate.
A Lifetime ISA is a type of savings account which gives you a 25% bonus on your savings every year, up to a maximum of £1,000. Then the money can be used to buy a house, or kept for retirement instead.
But you need to have had the account open for at least a year in order to get the bonus, so the sooner you open an account – with just £1 – the sooner you can get the bonus.
Martin told his studio audience and the young people watching from a college in Coventry: “This is something I genuinely want you to do on your 18th birthday. Now with the Lifetime ISA if you save in it towards your first home, the state will add a 25% bonus, you can put up to £4,000 a year in it. You put £4,000 in it the state will add £1,000 on top.
“That has to be used towards a home worth below £450,000…if you’re in the South East of England it can be a problem. And if you buy a home above £450,000 you pay a penalty to get your money out, something I’m campaigning to change.
“But this is the big reason I say on your 18th birthday and for everyone in here too. To use the Lifetime ISA, to get the bonus on your first property, it has to have been open one year. So even if you’re not ready to save when you’re 18, put £1 in, Moneybox is the best payer at 4.6% interest, and then the clock is ticking. And when you’re ready to put money in, it’ll be over a year, and then you’re able to get the bonus straight away.
“So everybody, 18th birthday, £1 in a Lifetime ISA, even if you’re not ready to use it. Then when you’re ready to use it it will work for you.”
But if you’re already over 18, you can still use this trick. You can open a Lifetime ISA at any age between 18 and 39, and the sooner you open it, the sooner you start the clock on the one year you need to have it open before getting the bonus.
If you already have a house or don’t want to buy a house, you can still keep the money in the LISA and use it for retirement savings instead, withdrawing it when you turn 60. The bonus is paid every year you save something in to your LISA, until you hit age 50, and then you can access it once you turn 60.
The Martin Lewis Money Show Live from September 30 is still available to watch via ITVX.
