The government could help you buy your next home
Homes are hard to afford, that’s for sure, so you’d be smart to snap up help where you can.
Well, Hargreaves Lansdown’s Lifetime ISA could be a real helping hand: with it, you can invest up to £4,000 a year, shelter any returns from UK tax, and get a 25% government bonus.
Here’s how it would work. If you paid £333 a month into your Lifetime ISA, the government would top that up by £83.25. In one year, that would add up to £4,995. In ten, that’s £49,950.
Add in a sprinkling of magical compound interest, and your pot could hit £64,515 if you assume an annual growth rate of 5%. Now, that could be a decent deposit for your next home.
Remember, though, nothing’s ever guaranteed. The amount you get back depends on the performance of the investments you choose.
And here’s the best bit: Hargreaves just cut its annual account charge almost in half, so now could be the perfect time to start saving in a Lifetime ISA. Please see details on charges and fees here.
You can open a LISA between 18 and 39. After 12 months from the first payment, you can use the money to make an eligible house purchase for a property worth up to £450,000. Or you can wait until you’re 60 and take your money out then. If you want to take money out before you’re 60 and you aren’t buying your first home, there’s usually a 25% government charge. That means you could get back less than you originally put in.
Tax rules can change and their benefits depend on your circumstances. Investments can fall as well as rise in value so you could get back less than you invest. The charges and fees figures provided do not take into account inflation and any charges you may pay. This is not personal advice if you are unsure if a course of action is suitable please seek advice.
