Top advice from the Money Saving Expert once again
Martin Lewis has urged people in the United Kingdom born before 2006 to follow his advice to earn a free £1,000 every year from the government.
The Money Saving Expert founder took to his Martin Lewis Podcast on BBC Sounds, where he explored a ‘super hero’ product which gives you up to one grand a year for free. And you don’t have to spend to get the cash.
Lewis, who regularly presents Good Morning Britain next to Susanna Reid, spoke out about the free money on the podcast’s latest episode released just days ago.
What is the scheme to get the free £1,000?
In his podcast, Lewis speaks in depth about a scheme called Lifetime ISAs, which you might also see described as a LISA.
Speaking about the product, he says that ‘almost everyone who hits 18 should put a pound in one right now’.
Explaining what a Lifetime ISA is on his show, Lewis says: “The Lifetime ISA is a product you can open when you are between the ages of 18 and 40.
“So the last day you can open it, is the day before your 40th birthday.”
How do I get a free £1,000 every year from a Lifetime ISA?
The rules of a Lifetime ISA say you can save up to £4,000 every year in it.
Whatever you put in will then be topped up by 25 percent of your annual contribution. So if you put in £1,000, you’ll be given £250 extra by the government.
But if you max it out for the year and have £4,000 squirrelled away, you will be given the full £1,000 on top.
“If you saved the maximum £4,000 a year, the state will add £1,000 that year,” Lewis says.
“You can do that year after year and you keep getting the bonus until you are 50.”
Martin Lewis is one of the UK’s most trusted finance experts (ITV)
What is a Lifetime ISA for?
Lewis says the Lifetime ISA is a great tool if you are looking at buying a house one day. If you’re older and have children turning 18, it’s a great tool to get them set up with early on for the same reason.
It is also a tax free amount, so you’ll have no nasty hidden fees at the end of it all.
Bonuses are paid in to your Lifetime ISA on a monthly basis. So, if you’ve paid in during that time, expect a top up. That cash should land within nine weeks.
If you can afford to put it to one side, do so (Getty Stock Images)
How can I use my Lifetime ISA? Is there a catch?
There are specific rules when it comes to taking the cash out of your Lifetime ISA. Ultimately, you can’t just withdraw it.
It is quite the opposite; you should be prepared not to spend it or access it for quite some time.
You can withdraw money from your Lifetime ISA if you’re:
- buying your first home;
- aged 60 or over;
- terminally ill, with less than 12 months to live.
If you really do need the money, as we all know circumstances change, your 25 percent bonus is taken as a charge on the account. So, you wont lose anything, but you also won’t gain a penny.
