If you are between the ages of 18 and 40, you can open a Lifetime ISA (LISA).
There is no maximum monthly contribution – you can save as little or as much as you want each month, up to £4,000 a year, and any savings you put into it before your 50th birthday will receive a government bonus of 25% – that’s a bonus of up to £1,000 a year!
You can use some or all of the money to buy your first home, or keep it until you’re 60.
The total amount you can save each year into all ISAs is £20,000.
Your savings and the bonus can be used towards a deposit on a first home worth up to £450,000 across the country.
Accounts are limited to one per person rather than one per home – so two first time buyers can both receive a bonus when buying together.
If you have a Help to Buy: ISA you can transfer those savings into the Lifetime ISA in 2017, or continue saving into both – but you will only be able to use the bonus from one to buy a house.
Alternatively, use it to save for retirement
After your 60th birthday you can take out all the savings tax-free.
You can withdraw the money at any time before you turn 60, but you will lose the government bonus (and any interest or growth on this). You will also have to pay a 5% charge.
Last updated: 25 June 2018