Latest news with #LifetimeISA
Scotsman
2 days ago
- Business
- Scotsman
Saving for a house deposit? Why you could be missing out on free £2,000 a year
This article contains affiliate links. We may earn a small commission on items purchased through this article, but that does not affect our editorial judgement. Many first-time buyers are failing to get their 25% bonus From gorgeous Georgian town houses to jaw-dropping penthouses, converted campervans to bargain boltholes. Take a peek at the finest homes across the UK. Sign up Thank you for signing up! Did you know with a Digital Subscription to Edinburgh News, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... A mortgage expert has explained how first-time buyers can boost their deposit when saving for a house He's shared three top tips to ensure you save as much as possible He says many buyers get confused about free £2,000-a-year bonus and end up missing out A mortgage adviser says taking advantage of free £2,000-a-year from the Government could help first-time buyers secure their dream home | Photo by SHVETS production: When looking for your first property you may think obtaining your deposit is a goal too far to reach, writes mortgage adviser Liam Cockerham. It's true that there is no one size fits all solution to magic up the deposit needed to get a mortgage. Advertisement Hide Ad Advertisement Hide Ad However, there are some clever tips and tricks you can utilize in order to grow your pot quicker and get you into that home a lot sooner. It is always important to work out your end goal before you start saving a penny. Otherwise it is like starting a race with no finish line. Mortgage adviser Liam Cockerham has offered his expert advice to first-time buyers on the pitfalls to avoid, including one easy mistake to make | Liam Cockerham/AS Photography ( You usually need a deposit of 5-10 per cent to get onto the property ladder. The interest rate you pay on your mortgage depends on the loan to value of your property, therefore the bigger the deposit the lower the interest rate and monthly payment. Advertisement Hide Ad Advertisement Hide Ad Below are my three top tips for achieving the deposit you need as quickly as possible. Make the most out of a Lifetime ISA (LISA) The lifetime ISA is a government-funded tool available to people aged between 18-40 who are first-time buyers. The maximum amount you can deposit in one year is £4,000 and in return for this you will get a 25 per cent bonus from the government, up to £1,000 each year. Now imagine you and your partner are looking to save for your first home and you both maximise your deposits in the Lifetime ISA for that year, suddenly your £8,000 has turned into £10,000. Advertisement Hide Ad Advertisement Hide Ad However, it is also important to note that where I see most people get confused with this account is that you must have the account open and active for a full year before you can claim any bonus. To withdraw your money it must be used to either put down a deposit for a home or you can take it after the age of 60. Otherwise you are liable for a 25 per cent penalty charge on the money in the account. Start a savings plan Starting and sticking to a regimented saving plan can speed your way to your deposit figure quicker than you can imagine. Instead of putting away £100 here and £60 there, set an actionable goal every month to put away a certain amount of money each month into a savings account. Advertisement Hide Ad Advertisement Hide Ad To save a figure of £10,000 would require putting away £167 a month for five years. Visualising your goal and breaking down the numbers makes the impossible seem possible just by looking at it from a different angle. Living at home The rush to have your own space and somewhere to call home can be hard to resist. However, before you race to get the keys to a rented home, just think what else you could be doing with your money. Advertisement Hide Ad Advertisement Hide Ad Instead of being in the loop of renting and trying endlessly to save for a deposit, take a step back and look at the bigger picture. A couple of extra years with your family is for many people the support they need to save hard and reach their goal sooner. Be disciplined and put what you would have spent on rent into a savings account. If you can bank that £500 a month you could have a £20,000 nest egg in just over three years. By following these three tips, you can hopefully start to set the seeds of your deposit bloom into a garden of opportunity and be ready to use this on your first home! Advertisement Hide Ad Advertisement Hide Ad Liam Cockerham is a Sheffield-based mortgage adviser at Stagg Mortgage Services. You can contact him at: liam@ 🏠 Whether you're planning to move or just curious what your home is worth, Purplebricks offers free valuations and fixed-fee selling support from local experts. 👉 Request a valuation or browse current listings in your area. Do you have a house hunting story or tips to share? You can now send your stories to us online via YourWorld at/ It's free to use and, once checked, your story will appear on our website and, space allowing, in our newspapers.
Scotsman
3 days ago
- Business
- Scotsman
Saving for a house deposit? Why you could be missing out on free £2,000 a year
This article contains affiliate links. We may earn a small commission on items purchased through this article, but that does not affect our editorial judgement. Many first-time buyers are failing to get their 25% bonus From gorgeous Georgian town houses to jaw-dropping penthouses, converted campervans to bargain boltholes. Take a peek at the finest homes across the UK. Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... A mortgage expert has explained how first-time buyers can boost their deposit when saving for a house He's shared three top tips to ensure you save as much as possible He says many buyers get confused about free £2,000-a-year bonus and end up missing out A mortgage adviser says taking advantage of free £2,000-a-year from the Government could help first-time buyers secure their dream home | Photo by SHVETS production: When looking for your first property you may think obtaining your deposit is a goal too far to reach, writes mortgage adviser Liam Cockerham. It's true that there is no one size fits all solution to magic up the deposit needed to get a mortgage. Advertisement Hide Ad Advertisement Hide Ad However, there are some clever tips and tricks you can utilize in order to grow your pot quicker and get you into that home a lot sooner. It is always important to work out your end goal before you start saving a penny. Otherwise it is like starting a race with no finish line. Mortgage adviser Liam Cockerham has offered his expert advice to first-time buyers on the pitfalls to avoid, including one easy mistake to make | Liam Cockerham/AS Photography ( You usually need a deposit of 5-10 per cent to get onto the property ladder. The interest rate you pay on your mortgage depends on the loan to value of your property, therefore the bigger the deposit the lower the interest rate and monthly payment. Advertisement Hide Ad Advertisement Hide Ad Below are my three top tips for achieving the deposit you need as quickly as possible. Make the most out of a Lifetime ISA (LISA) The lifetime ISA is a government-funded tool available to people aged between 18-40 who are first-time buyers. The maximum amount you can deposit in one year is £4,000 and in return for this you will get a 25 per cent bonus from the government, up to £1,000 each year. Now imagine you and your partner are looking to save for your first home and you both maximise your deposits in the Lifetime ISA for that year, suddenly your £8,000 has turned into £10,000. Advertisement Hide Ad Advertisement Hide Ad However, it is also important to note that where I see most people get confused with this account is that you must have the account open and active for a full year before you can claim any bonus. To withdraw your money it must be used to either put down a deposit for a home or you can take it after the age of 60. Otherwise you are liable for a 25 per cent penalty charge on the money in the account. Start a savings plan Starting and sticking to a regimented saving plan can speed your way to your deposit figure quicker than you can imagine. Instead of putting away £100 here and £60 there, set an actionable goal every month to put away a certain amount of money each month into a savings account. Advertisement Hide Ad Advertisement Hide Ad To save a figure of £10,000 would require putting away £167 a month for five years. Visualising your goal and breaking down the numbers makes the impossible seem possible just by looking at it from a different angle. Living at home The rush to have your own space and somewhere to call home can be hard to resist. However, before you race to get the keys to a rented home, just think what else you could be doing with your money. Advertisement Hide Ad Advertisement Hide Ad Instead of being in the loop of renting and trying endlessly to save for a deposit, take a step back and look at the bigger picture. A couple of extra years with your family is for many people the support they need to save hard and reach their goal sooner. Be disciplined and put what you would have spent on rent into a savings account. If you can bank that £500 a month you could have a £20,000 nest egg in just over three years. By following these three tips, you can hopefully start to set the seeds of your deposit bloom into a garden of opportunity and be ready to use this on your first home! Advertisement Hide Ad Advertisement Hide Ad Liam Cockerham is a Sheffield-based mortgage adviser at Stagg Mortgage Services. You can contact him at: liam@ 🏠 Whether you're planning to move or just curious what your home is worth, Purplebricks offers free valuations and fixed-fee selling support from local experts. 👉 Request a valuation or browse current listings in your area.
Metro
27-05-2025
- Business
- Metro
How this smart app can help save for a first home
Getting on the housing ladder is a common life goal that, for many of us, seems increasingly difficult to achieve. In fact, there's a good chance the very mention of it makes you feel slightly uneasy when merely keeping up with the rising cost of living feels tricky enough… Then there's the fact that mortgage rates are higher than they've been for most of the past decade. Oh, and did we mention house prices? The UK average is now £268,319, or £555,625 if you live in London¹. But while the last few years haven't been easy for first-time buyers, we have also seen some big technological leaps forward that are benefiting savers. One of them is Plum, a smart money app that's making it faster and easier to save for a house with access to impressive interest rates on great savings products. Here's how you could reach your dream of home ownership with Plum (available on App Store and Google Play) – Saving for your first home can feel like a long and lonely endeavour, so if you're offered a helping hand, it's worth grabbing it! With a Lifetime ISA, you can save up to £4,000 a year towards your first home or retirement, with this money counting towards your £20,000 ISA allowance. Then here's the cool part – the government will add a 25 per cent bonus to whatever you save (up to £1,000 a year). So, if you save the annual maximum of £4,000, you'll get an extra £1,000, turning your total into £5,000! This money grows further thanks to a great 4.75% AER (variable) interest rate for the first 12 months, including a 1.14% AER (variable) bonus, with any interest payments free from tax. You can use your money after 12 months on a house worth up to £450,000 (or once you turn 60 if you're saving for retirement). Bear in mind there's a penalty for withdrawing your money for any other reason, so take some time to ensure a Lifetime ISA is right for you. But if it is, and you're aged between 18 and 39, opening a Plum Lifetime ISA is a breeze – you just need to download the app and answer a few quick questions. The faster you get going, the sooner you can start to build up your balance and enjoy that lovely government bonus! Note that you may get back less than you paid into your LISA as a 25% government penalty applies if you withdraw money for any reason other than buying your first home or retirement. Rates may change. If you sign up for the LISA, you have the right to cancel it fully within 30 days. Savers are currently benefitting from a rise in interest rates since 2021. While this can help protect cash from the effects of inflation as you save towards your first home, it can bring a sting in the tail in the form of a higher tax bill. That's because basic rate taxpayers are limited to earning £1,000 of tax-free interest each year, or £500 if you fall within the higher rate. If you earn more interest than this, you'll be charged tax at the same rate as your income, notching your savings growth down a gear. Cash ISAs help you avoid this trap by allowing you to save up to £20,000 a year tax-free. Just remember that you'll already have used £4,000 of your annual allowance if you've maxed out a Lifetime ISA, leaving £16,000 remaining. By opening a Plum Cash ISA, you could access a competitive rate of up to 4.95% AER (variable), which includes a bonus rate of 1.66% AER (variable) for the first twelve months. The interest rate for transfer-ins is 3.29% AER (variable). A lower rate of 3.29% AER (variable) applies after the first 12 months. Plum offers Cash ISAs without subscription fees. And, just like the Plum Lifetime ISA, your savings are protected by the Financial Services Compensation Scheme (FSCS) up to £85,000. Tax treatment depends on your individual circumstances and may be subject to change in the future. Saving for a big goal like buying a house is a bit like training for a marathon. After all, you're far more likely to succeed by running relatively short distances on a regular basis than attempting the whole 42.2km in one go… Automating your savings with Plum helps you save little and often in the background, so you're constantly progressing towards your goal even when you're not thinking about it. Plum's algorithm analyses your income and spending patterns to work out how much it can set aside every so often without leaving you short. Crucially, this means you won't end up with an unexpected hole in your account before payday that you can only fill by raiding your savings! Customers who enabled the Automatic rule save an average of £53.58 more each month (equal to £642.98 over a year). And there are lots more Auto Savers you can try, too, like Rainy Days, which puts aside a set amount each time it rains in your area. That way, the rain on your roof can start to sound like the rain on the roof of… your future house! Note that some smart Saving Rules are paid features and therefore fees apply. You will need to review periodically that automation is suitable for your circumstances. Try Plum TODAY by downloading it for free from the App Store or Google Play. ¹UK House Price Index for February 2025- Plum is the trading name of Plum Fintech Limited and Saveable Limited. Plum Fintech Limited is registered and regulated by the Financial Conduct Authority (FRN 836158). Saveable Limited is authorised and regulated by the FCA (FRN: 739214)
The Independent
21-05-2025
- Business
- The Independent
How first-time buyers are getting a £50,000 lifetime ISA boost revealed – but there's a catch
First-time buyers are increasingly utilising Lifetime ISAs (Lisas) to bolster their deposits, with some contributing over £50,000 towards their property purchase in 2022-23, according to HMRC data obtained by money app Plum. Designed to support both first-time homeownership and later-life savings, Lisas offer a significant government bonus. An analysis of authorised withdrawals – those eligible for the bonus – revealed that the top 25 Lisa withdrawals for home purchases averaged £51,000 during the last financial year. The data further highlights the growing popularity and impact of Lisas. Over 42,800 withdrawals for home purchases were for at least £10,000, with over 11,200 exceeding £20,000. The Lisa scheme allows individuals to save up to £4,000 annually until age 50, receiving a 25 per cent government bonus on their contributions, capped at £1,000 per year. This incentive makes Lisas an attractive option for those looking to step onto the property ladder. If savers make withdrawals for any other reason than buying their first home or saving for later life face a withdrawal charge of 25 per cent. And there is another crucial catch: if someone is using a Lisa for their first home, the property must cost £450,000 or less. Rajan Lakhani of Plum, which is offering a 4.75 per cent Lisa rate, said: 'Against a backdrop of recent global volatility it's reassuring to know the Lifetime Isa can deliver stunning gains, regardless of the broader economic outlook. 'And don't forget that this Government boost comes in addition to any interest you earn on savings.' As part of its Lisa launch, Plum has created a digital tool to give savers an indication of how long it could take them to build the deposit necessary for a starter home in their desired postcode. Speaking to MPs earlier this year, money expert Martin Lewis criticised the Lisa's property price condition, calling it a 'major hole.' This is because, as house prices rise, more first-time buyers are looking to purchase properties over this threshold. But in this scenario, they must give back the 25 per cent 'interest' from their Lisa. This creates a major issue, he told Treasury Committee in February: 'Many people think that if you add 25 per cent and take off 25 per cent you get back to where you started. You don't. You end up with 6.25 per cent less than where you started.'
Yahoo
21-05-2025
- Business
- Yahoo
How first-time buyers are getting a £50,000 lifetime ISA boost revealed – but there's a catch
First-time buyers are increasingly utilising Lifetime ISAs (Lisas) to bolster their deposits, with some contributing over £50,000 towards their property purchase in 2022-23, according to HMRC data obtained by money app Plum. Designed to support both first-time homeownership and later-life savings, Lisas offer a significant government bonus. An analysis of authorised withdrawals – those eligible for the bonus – revealed that the top 25 Lisa withdrawals for home purchases averaged £51,000 during the last financial year. The data further highlights the growing popularity and impact of Lisas. Over 42,800 withdrawals for home purchases were for at least £10,000, with over 11,200 exceeding £20,000. The Lisa scheme allows individuals to save up to £4,000 annually until age 50, receiving a 25 per cent government bonus on their contributions, capped at £1,000 per year. This incentive makes Lisas an attractive option for those looking to step onto the property ladder. If savers make withdrawals for any other reason than buying their first home or saving for later life face a withdrawal charge of 25 per cent. And there is another crucial catch: if someone is using a Lisa for their first home, the property must cost £450,000 or less. Rajan Lakhani of Plum, which is offering a 4.75 per cent Lisa rate, said: 'Against a backdrop of recent global volatility it's reassuring to know the Lifetime Isa can deliver stunning gains, regardless of the broader economic outlook. 'And don't forget that this Government boost comes in addition to any interest you earn on savings.' As part of its Lisa launch, Plum has created a digital tool to give savers an indication of how long it could take them to build the deposit necessary for a starter home in their desired postcode. Speaking to MPs earlier this year, money expert Martin Lewis criticised the Lisa's property price condition, calling it a 'major hole.' This is because, as house prices rise, more first-time buyers are looking to purchase properties over this threshold. But in this scenario, they must give back the 25 per cent 'interest' from their Lisa. This creates a major issue, he told Treasury Committee in February: 'Many people think that if you add 25 per cent and take off 25 per cent you get back to where you started. You don't. You end up with 6.25 per cent less than where you started.'
