Help to Buy versus the Lifetime ISA
As of 30 November 2019, the Help to Buy ISA closed to all new accounts. If you opened one before this date, you can continue saving into it for another 10 years.
But did you know the Lifetime ISA (LISA) is here to stay and offers more than just helping you get on the housing ladder?
Where the Help to Buy ISA allows you to save up to £3,600 in the first year and £2,400 in subsequent years with a 25% government bonus, the LISA allows you to save £4,000 per year with a 25% government bonus.
It also allows you to keep saving into it for retirement, up until the age of 50 – that’s up to £32k in government bonuses! So not only does it help first time buyers, it’s the account that keeps on giving until retirement!
The bonuses are also paid in monthly, rather than on completion of first home purchase with the Help to Buy ISA, but you have to have held an account for a year.
If you withdraw money from the LISA before age 60 for anything other than first home purchase, you’ll incur a penalty. But if you're serious about getting on the property ladder, it’s a good incentive to keep saving. The point is, if there's an emergency, you can get to your cash if you need to.
And for those 25%+ of millennials who said buying a first home is their top priority in our latest research, the LISA is a no brainer!
Article by
NatWest Cushon
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