Following the popularity of the Help to Buy Isa, in 2017 the Government decided to introduce a new scheme to help cash-strapped millennials save for their first home: the Lifetime Isa (Lisa).
Anyone aged between 18 to 39 can open a Lisa into which they can add up to £4,000 a year. The Government then tops up anything you put in with an extra 25 per cent, so up to £1,000 a year.
There are, however, restrictions on when you can withdraw the money, and breaking them means you pay a hefty penalty fee. There is also a wide variety of Lifetime Isas to invest your money in, which we have highlighted below.
There is no upper limit to the amount of bonus you can receive and you can keep saving until the age of 50. That means someone saving the maximum amount every year for 10 years would have a free £10,000 to put towards their first home.
If you’re saving as a couple, each person can open their own Lisa, with the potential to earn up to £20,000 in top-ups over that time.
You can either leave your money in a cash Lisa where it will earn interest, or invest it via an investment Lisa, also known as a stocks and shares Lisa, in the hope that your pot will grow in value. Make sure to check the best interest rates available on cash Lisas online, as well as the fees charged by different providers to invest through your Lisa.