{"id":103803,"date":"2025-05-15T15:08:09","date_gmt":"2025-05-15T15:08:09","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/103803\/"},"modified":"2025-05-15T15:08:09","modified_gmt":"2025-05-15T15:08:09","slug":"martin-lewis-in-isa-4000-alert-and-says-everyone-should-have-one-personal-finance-finance","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/103803\/","title":{"rendered":"Martin Lewis in ISA \u00a34,000 alert and says ‘everyone should have one’ | Personal Finance | Finance"},"content":{"rendered":"

Martin Lewis has given parents a \u00a34,000 warning and explained they could be missing out on a \u2018free\u2019 \u00a31,000 if they don\u2019t take action now. Speaking on his BBC Podcast, the personal finance expert<\/a> was asked a quiestion by a viewer of if they should take out a Lifetime ISA for their daughter.<\/p>\n

And Mr Lewis said that all parents could be missing out on a huge boost – and all they need to do to make sure they can get it is to open an account with just \u00a31. Host Adrian Chiles said: \u201cWe\u2019ve got one more question from Sarah. \u2018I have an 18-year-old daughter should she get a help to buy ISA now?\u201d<\/p>\n

Mr Lewis said: \u201cIt\u2019s now called a Lifetime ISA and it is a slightly different product. Very simply if your daughter plans to buy a first time home and is pretty sure that she\u2019s going to do it and it\u2019s going to be a home that costs under \u00a3450,000 then putting money and saving money into a Lifetime ISA is really powerful because you can put up to \u00a34,000 a year and the state will add 25 per cent on top.\u201d<\/p>\n

Government information says that the Lifetime ISA to buy a first home or save for later life. The person must be 18 or over but under 40 to open a Lifetime ISA.<\/p>\n

The Treasury says: \u201cYou can put in up to \u00a34,000 each year, until you\u2019re 50. You must make your first payment into your ISA before you\u2019re 40. The government will add a 25% bonus to your savings, up to a maximum of \u00a31,000 per year.\u201d<\/p>\n

Mr Lewis explained: \u201cIn other words if you max it out the state will give you \u00a31,000 on top of the \u00a34,000 every tax year until you buy.<\/p>\n

\u201cYou need to have it open a year before you can buy a house. The key problem if you withdraw money from it for any other reason than buying a qualifying first time house, and qualifying means a house under \u00a3450,000, you\u2019re charged an effective penalty of 6.25 per cent. So the state will take some of your money if you withdraw it. Alternatively you could leave it there until you\u2019re aged 60 and just take the money out then and you won\u2019t pay a penalty.<\/p>\n

\u201cLifetime ISAs are only for those aged 18-39. Go and do some reading on this, but in simple terms, if she\u2019s definitely going to buy a house in the next 5-10 years and you\u2019re in an area where it\u2019s very unlikely those prices would be above \u00a3450,000, I would absolutely be putting money in there; if you\u2019re not, I wouldn\u2019t be.\u201d<\/p>\n

Even if the parent doesn\u2019t think that a house purchase is imminent Mr Lewis said it was worth taking action now: \u201cBut one thing I would do, even if you think you\u2019re not going to do it, and I would advise every parent of an 18, 19, 20, 21 year old put \u00a31 in a Lifetime ISA. Here\u2019s the reason why. To get the bonus you have to have had the account open for a year.<\/p>\n

\u201cSo let\u2019s just suppose you put \u00a31 in now and you don\u2019t think you\u2019re going to buy a house. In a year\u2019s time something\u2019s changed and you think you\u2019re going to buy a house. You could then put \u00a34,000 in and then pretty quickly within a week or two you would get \u00a31,000 bonus and you could use it because you\u2019ve had it opened for over a year.<\/p>\n

\u201cSo everybody should have one opened. What\u2019s the risk of doing this? Well the top paying Lifetime ISA is 4.7 per cent but the risk is you\u2019d lost 6.25 per cent. I personally think the risk of 6 and a quarter pence, which is all you\u2019re risking if you put \u00a31 in, is worth it to have the facility there.\u201d<\/p>\n

Withdrawing money from your Lifetime\u00a0ISA<\/p>\n

You can withdraw money from your ISA if you\u2019re:<\/p>\n