Martin Lewis Reveals How All Under 40s Can Get Free £1,000 A Year From The Government
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Martin Lewis has revealed how all under 40s in the UK could earn themselves £1000 a year from the government - actual free money!
Yep, writing in his weekly newsletter, Mr Money himself has advised all under 40s in the UK to take out a Lifetime ISA (LISA) to make the most of the yearly £1,000 government bonus.
While this may sound too good to be true, it genuinely isn’t. LISAs give first-time buyers a 25% bonus of up to £1,000 per year on their savings, after the account has been open for a year.
All you need to get things started is to open a LISA - which you can do with just £1 - and start putting away as much as you can afford. But don’t worry even if you’re not a first-time buyer you can use it to save for your retirement instead.
Lewis wrote: "If you hope to buy your first home in the next 10 years, put £1 in a Lisa now.
"Lifetime ISAs give first-time buyers a 25% bonus (up to £1,000 a year) on their savings, but only after it's been open a year. So open one with £1 now, to start the clock, so it's usable if/when needed."
But before you go thinking you can just pile tens of thousands of pounds in (some chance) in order to get the 25% added, just hold up.
The scheme is only eligible up to a maximum of £4,000 a year meaning the maximum bonus you can get each year is £1000 - still, not to be sniffed at.
On top of that you will also be entitled to some interest on your savings which, because it's an ISA, will be tax-free, although with interest rates outrageously low at the moment it’s likely to be in the pence!
Sorry to rub it in, but LISAs can only be opened by people under the age of 40, so if you’re reading this and you’re over 40 well, sorry about the awkward.
It’s also worth remembering that LISAs can only be used for either buying your first home or for retirement (in which case you can only access the funds after your 60th birthday) so (un)fortunately you can’t suddenly decide to blow the whole lot on a trip to Malia - well unless you’re over 60 I suppose.
In practical terms, if you manage to save £1,000 in the first year this’ll be topped up to £1,250, and if you really scrape those pennies and put away the maximum £4,000, you'll have £5,000 in with the bonus!
The top up will then reset and the next bonus will be based on whatever you save in year two.
According to Moneysavingexpert ,if you are nearing the old 40th, you can still open one before hitting the cut-off age and carry on putting money in until the day before your 50th birthday, which if my maths is correct, could still mean that if you put away the max £4000 for ten years you’ll end up with a nice 60th birthday present of £50,000.
Maybe Malia isn’t such a bad shout…
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