The king of money-saving hacks, Martin Lewis, has encouraged everyone born between 1986 and 2007 to immediately stick a quid into a LISA account.
In the latest episode of his popular BBC Sounds podcast, the 53-year-old was targeting wannabe homeowners aged between 18 and 39 who are desperate to get on the property ladder.
To help smoothen this process, he told listeners to transfer just £1 into a Lifetime ISA as soon as possible in order to benefit from the limited-time rewards it provides.
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This government-backed scheme offers first-time buyers 25% extra on savings of up to £4,000 per year in the tax-free bank account. The bonus, which can reach £1,000 for each year you have the LISA and then spent on properties worth up to £450,000, will only be payable after one year, so house-hunters don’t need to put the full amount in right away to get it.
You can put money into a LISA until the age of 50, although you’d need to make your opening payment before turning 40 to be eligible for the reward.
“Just putting a pound in now even if you’re not ready to use it means when you are ready to use it the clock will have been ticking,” said Martin. “You would have had it open a year. So you’re perfectly eligible to suddenly go and get the bonus when you want.
“In fact, parents, on your kid’s 18th birthday, why not get them a LISA and put a pound in it?”
Banks offering the LISA account include Halifax, NatWest and HSBC.
Yet despite giving the scheme a thumbs-up, Martin has campaigned for the £450k house price limit to be raised, telling the Treasury Select Committee: “We have a succession of young people who are saving in the vehicle they have been encouraged to save in by the state, who are then trying to use their savings to buy a first-time property, but due to house price inflation their property has just tripped above the £450,000 level.
“Then not only do they not get the £1,000 a year bonus they were intended to get – which I understand is legitimate as a threshold – but they are fined by the state effectively 6.25% of their own money in order to withdraw that money to get the cash out.”