What is a LISA? Is the governments latest help to buy scheme, you can deposit up to £4,000 every year and you will get 25% bonus when buying your first home.
Anyone between the ages of 18-39 can use the scheme. To get the bonus you will have to have had an account open for over one year, you can open it from as little as £1, but I would recommend trying to max it out if possible.
The scheme is only eligible if the house price is £450,000 or less and it must be your first home. LISA’s are tax-free so even more reason to use. You can deposit a maximum of £20,000 into ISA’s each year, so £4000 into your LISA and £16,000 into a different ISA.
You will be charged if you withdraw money from the LISA unless it is for buying property. The charge is the government bonus plus extra, so try and avoid withdrawing prematurely at all costs. The cost works out around 6% of the deposited amount.
As with most banks your money (£85,000) is protected by the FSCS, but this includes your other accounts so could be worth using a different banking provider if you are near the amount. If you are buying together you can both use your LISA, only if you have both never owned a property.
What to do? If you are looking to buy at some point we would recommend you open one up as soon as possible, with the new tax year closing in. Saving up for a property can be daunting but this is a good opportunity and we would recommend taking advantage of it.