You are here: Home - Mortgages - First Time Buyer - News -

Only cash Lifetime ISA provider nets £123m of deposits in under a year

0
Written by: Paloma Kubiak
23/02/2018
Skipton Building Society reports 65,000 customers have opened its cash Lifetime ISA savings product in the eight months since launch.

The mutual remains the only provider to offer a cash version of the Lifetime ISA – the government’s first-time buyer come retirement savings scheme.

Skipton launched the product in June 2017, offering 0.5% on deposits, which are also eligible for a 25% government bonus (maximum £1,000 a year). But, following the Bank of England Base rate late last year, the interest rate has risen to 0.75%.

To date, there are a number of investment platforms offering a stocks and shares Lifetime ISA (LISA) but with initial government expectation that 200,000 would be opened in the 2018/19 tax year, Skipton’s amassed a third of the accounts.

As such, there have been over £123m worth of deposits (including Help to Buy ISA transfers to the LISA, though it’s expecting up to 9,000 more accounts to be transferred), and Skipton’s expecting £30m in government bonuses in May this year.

According to Kris Brewster, head of products at Skipton Building Society, “If the £123m were put towards a 5% deposit, that could buy £2.6bn worth of housing”.

Brewster, added: “65,000 people is the size of a large town. We’re delighted to be able to help this many people and we’re a little surprised to be the only cash LISA provider.

“There is an element of timing as we had the IT capability to launch the LISA. We haven’t got a H2B ISA – this market was saturated and when the LISA was unveiled in the Budget, given it was a scheme to help first-time buyers, that was right up our street as a building society.”

Analysis of the numbers revealed that 72% of its LISA savers are saving for a home – 13% for retirement, and 15% for both and Brewster admits that the focus is on property rather than pensions as cash may not be appropriate for long-term retirement income savings.

The average cash LISA owner is aged 26, helping knock off a few years from the early 30s UK average. But Skipton revealed that 1,236 18-year-olds have opened the products.

Savers have an average of £1,609 deposited and more than two thirds live in London and the South East. The split between male and female savers is roughly 50/50.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

YourMoney.com Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
Not sure you want to buy a house? Five alternative options for your money

There are plenty of reasons why you might not want to buy a house: it’s very expensive, it’s inflexible and...

Close