Lifetime Isa gaining ground on Help-to-Buy
New figures from the Nottingham Building Society show the Lifetime ISA is up to seven times more popular than the Help-to-Buy ISA. The Government has previously confirmed it will go ahead with plans to stop accepting new applications for the Help-to-Buy ISA from 30 November this year.
Unlike Help-to-Buy, the Lifetime Isa can be invested in stocks and shares as well as cash and can be used for retirement and house purchases. The Lifetime Isa allows investment of up to £4,000 tax-free every year, with a 25% government bonus being paid annually until the account holder turns 50, when they will no longer be able to make deposits. The pot has to be used for a deposit on a first home or retirement, otherwise the government will claw back its contribution.
Jenna McKenzie Day, senior savings manager at The Nottingham said: “We’re not surprised by the statistics because we know LISA is a genuinely beneficial account that in many cases is helping people buy their first home sooner. A large majority of those opening a LISA with The Nottingham are first-time buyers planning to use the funds for their first home*. That means potential bonuses of up to £1,000 a year are available for every £4,000 saved.”
“The UK is waking up to these benefits and with the Government still planning to pull the Help-to-Buy ISA in November this year, this will only gain momentum. Since the start of the year, we have seen over 7 times as many Lifetime ISAs opened compared to the Help-to-Buy ISA, so it’s clear that the LISA is primed to fill the gap that Help to Buy will leave when it’s stops in November.”