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First time home buyers can claim £1000 from the government per tax year using Lifetime ISAs
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First time home buyers can claim £1000 from the government per tax year using Lifetime ISAs

32
Posted 10th Jul
I noticed from a quick look that there isn't any info on this site regarding Lifetime ISAs (LISAs), and for anyone looking to buy their first home (like me!) it's super useful info and you could end up earning upwards of £2000 a year for couples who each hold a LISA.

The way it works is you can invest up to £4000 into a savings account per tax year and get a 25% government bonus (£1000) on top of your investment (plus interest, which varies from whichever society you invest with). Lifetime ISAs tend to take a year to mature before you can withdraw from them but once they do mature you can withdraw at any time to use towards your first home purchase.

If you end up needing a few years to save up, you can essentially keep putting in £4000 every tax year and keep getting a 25% bonus. Couples can open an account each, so each year you save you could essentially be getting £2000 from the government. For free.

Important info:
You can ONLY withdraw from your LISA when purchasing your first home or when you turn 60 (they can be kept open following your home purchase and used as a retirement savings account)
Withdrawing from the account for any reason other than the above will incur a 25% government charge, which will end up mean you lose a bit of money rather than making it, so you have to be sure this is right for you.

You can check out the best tips from the Martin Lewis Money saving website, link is here or at the 'Get Deal' button. It lists the currently available LISAs and the best interest rates going (Moneybox is currently leading the way).

moneysavingexpert.com/sav…sas

If you know anyone who this might help - definitely pass it on, I'm glad it was sent my way, me and my wife are now much closer to purchasing our first house!
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Can't open if you are over 40. Too young to be a boomer, too old to be a millennial...looks like my generation has been written off already.
The gov will do anything to keep house prices up, even part fund them
32 Comments
Can't open if you are over 40. Too young to be a boomer, too old to be a millennial...looks like my generation has been written off already.
I’m sellers my my house soon and will have 60k in my bank profit to put down on new house , but I’m not buying till mid 2020

Could I use this scheme and take money out when needed
Better or worse than a help to buy?
ashmac10/07/2019 13:57

I’m sellers my my house soon and will have 60k in my bank profit to put d …I’m sellers my my house soon and will have 60k in my bank profit to put down on new house , but I’m not buying till mid 2020 Could I use this scheme and take money out when needed


I believe it's for first time buyers only and if you withdraw for any other reason than paying for a house it cost you money.
The gov will do anything to keep house prices up, even part fund them
MariusStreicher10/07/2019 14:00

Better or worse than a help to buy?


Help to Buy is limited to £200 a month after initial £1200 whereas lifetime isa is up to £4000 a year with no monthly limit so more flexible.

However, there are penalties if you withdraw money from lifetime isa but you a free to move money as you please with help to buy as long as you remain in the £200 monthly limit.

Lastly, help to buy is a lot more common whereas lifetime bit offered by all banks
ashmac10/07/2019 13:57

I’m sellers my my house soon and will have 60k in my bank profit to put d …I’m sellers my my house soon and will have 60k in my bank profit to put down on new house , but I’m not buying till mid 2020 Could I use this scheme and take money out when needed


No. It's for first time buyers
kuu10/07/2019 14:15

Help to Buy is limited to £200 a month after initial £1200 whereas l …Help to Buy is limited to £200 a month after initial £1200 whereas lifetime isa is up to £4000 a year with no monthly limit so more flexible. However, there are penalties if you withdraw money from lifetime isa but you a free to move money as you please with help to buy as long as you remain in the £200 monthly limit. Lastly, help to buy is a lot more common whereas lifetime bit offered by all banks


What help to buy are you referring to?
Another prop
MariusStreicher10/07/2019 14:00

Better or worse than a help to buy?



Help to buy limited to 250k houses I think

didnt realise that and our first ended up being 300 so was totally useless

sounds like a lot but due to help to buy mortgages you only ever see 80% of the mortgage if you pay in enough in the first five years, so I’ll never see mortgage bigger than 240, if that makes any sense.

feel free to pm for clarific
MariusStreicher10/07/2019 14:00

Better or worse than a help to buy?


I had a help to buy and moved it to one of these

The interest you earn is typically a lot less with a lifetime isa (I was earning 3.5% on the H2B and only 1% on the LISA) however seems to be a better account .

I think I’m right in saying you can’t use H2B towards your actual deposit where as the LISA you can.

Also it’s nice that the government bonus shows as a physical balance in the LISA where as it didn’t with the H2B, so you earn interest on the bonus as long as you never withdraw any funds
Regprentice10/07/2019 13:24

Can't open if you are over 40. Too young to be a boomer, too old to be a …Can't open if you are over 40. Too young to be a boomer, too old to be a millennial...looks like my generation has been written off already.


Your generation got absolute obliterated. My hen isn't that great either. We just missed free university...

Anyone born in the 70s and early 80s had it so easy...
ashmac10/07/2019 13:57

I’m sellers my my house soon and will have 60k in my bank profit to put d …I’m sellers my my house soon and will have 60k in my bank profit to put down on new house , but I’m not buying till mid 2020 Could I use this scheme and take money out when needed


trouble is every other seller has huge profit in theirs so all relative.
Danjw9110/07/2019 19:06

Comment deleted


It's not the government that's suffering though. There's no doubt the rich can take advantage of the scheme, but that's true of a lot of government schemes and they don't care. Heck even basic taxes can be manipulated by rich people and corporations to avoid paying. The scheme itself is only really in place to keep house prices up; allowing rents to stay high, keep poorer people off the housing ladder, and those with large property portfolios to stay well in the black.
It's not for the benefit of the average Joe at all but the politicians and their mates maintaining their position at the top of the pile - and sod everyone else.

Sadly most of the less well off will have felt forced into the scheme to have any chance of buying their own place, and the government owns a % of those houses so it will get the money back one way or another, whilst making plenty off the interest in the process.
Most people will be unlikely to pay back those loans interest free in 5 years, and more likely never could as the loan is based on a % of the value of the house and will therefore increase or decrease over time in line with prices (but fat chance the government would allow a decrease and losing their money!).
back on topic ...

can can this be used if one part already / has already owned a house but the other (LISA opener) hasn’t
thanks in advance guys
N3ildb10/07/2019 19:59

back on topic ... can can this be used if one part already / has already …back on topic ... can can this be used if one part already / has already owned a house but the other (LISA opener) hasn’t thanks in advance guys


Yes. If you have never owned a property (registered on Land Registry) you can use a LISA for a new property. The person that has owned a house can't use it.
slannmage10/07/2019 18:26

Comment deleted


This is one of the most idiotic things I have ever read.
sfsorrow10/07/2019 20:32

This is one of the most idiotic things I have ever read.


His first 3 sentences are accurate to be fair
Thetruthh10/07/2019 21:42

His first 3 sentences are accurate to be fair


And the rest is dribble and hate...
ashmac10/07/2019 13:57

I’m sellers my my house soon and will have 60k in my bank profit to put d …I’m sellers my my house soon and will have 60k in my bank profit to put down on new house , but I’m not buying till mid 2020 Could I use this scheme and take money out when needed



Please do tell us more.
Have you thought of adapting it into a film?
Already have one of these but heat for bringing it to everyone's attention!


Difference between lifetime ISA & help to buy.
It’s worth noting that you can also only withdraw the money (& Bonus) for your first house after 12months have lapsed from the opening of the Lifetime ISA account. (Penalty free)
Can you open a lifetime ISA if you already have a help to buy ISA?
david_wavid11/07/2019 10:10

Can you open a lifetime ISA if you already have a help to buy ISA?


yes , but you can only use one for the purchase of a home. In which case the LISA would be used for retirement route, or use the LISA and the h2b becomes pointless and you remove the funds.
used this to buy my house last month, and so did my wife. The £6k was very helpful, but it's only really open to folk with cash.

we were lucky enough to be able to save £4k each over 3 financial years, and the final £2k was made avaialbe due to luck with the purchase dates.
If I have plenty of cash savings and my partner doesn't, is there anything stopping me sending her 4k per year to put straight into this so that we can max out x2 until we buy our first home?

Edit: If the bonus is capped to 1k per year there is no real incentive to pay in after the first 4k? Or am I missing something?
Edited by: "IlIlIlIlIlIl" 11th Jul
IlIlIlIlIlIl11/07/2019 13:58

If I have plenty of cash savings and my partner doesn't, is there anything …If I have plenty of cash savings and my partner doesn't, is there anything stopping me sending her 4k per year to put straight into this so that we can max out x2 until we buy our first home?Edit: If the bonus is capped to 1k per year there is no real incentive to pay in after the first 4k? Or am I missing something?


i don't think so, no.

it's £1k for every £4k added each year. if you didn't pay in any more in the following years, there would be no bonus.

so;
y1 - £4k becomes £5k,
y2 - £8k becomes £10k,
y3 - £12k becomes £15k,
y4 - £16k becomes £20k, etc.
ANd Renters also get this bonus too ? No? what a surprise ..
.y1 - £4k becomes £5k, +plus interest
y2 - £8k becomes £10k, +plus interest on 4k? or 5k?
y3 - £12k becomes £15k, +plus interest on 8k? or 10k?
Edited by: "GwanGy" 12th Jul
interest @ 1% on the full amount, i think. but then you can only pay in the limits.
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