Martin Lewis issues urgent savings warning – easy way to avoid grandkids missing out on £1,000s in free cash
"You can use it to save up to £4,000 a year, towards either a first home costing up to £450,000 or for retirement, and the state adds a bonus of up to £1,000 a year on top."You can continue to put money into the LISA until the day before your 50th birthday ."
As the LISA is an ISA - and individual savings account - the interest you make on your savings is tax-free, and the money you put in your LISA will count towards that."The overall ISA limit is £20,000 in the 2023/24 tax year. You are allowed to split this between a LISA and put the remainder in a cash ISA," Martin Lewis'And if you already have an ISA set up, some providers will even let you transfer money from that into your LISA.
MoneySavingExpert did warn, however, that you will have to pay a penalty if you withdraw the cash and don't use it for a first home or retirement. "Under the normal LISA rules, you can take some or all of your cash out of a LISA before age 60 even if you're not buying a property – but you're charged 25% of the amount withdrawn, so it's best to try to only use the LISA if you're sure the cash is for one of the two defined purposes: buying a first-home costing £450,000 or less, or retirement," he stated.
He urged that if you opened one of these accounts more than six months ago, that it likely has a "terrible" rate due to rising interest rates.
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