In the 2016 budget, there were a few surprises, including the announcement of a new ISA which could potentially help first time buyers get onto the housing ladder.
The Lifetime ISA will offer an alternative, but similar, kind of saving scheme for a first time homebuyer to the Help to Buy ISA.
They do differ slightly, however. The Lifetime ISA can be used as a pension booster, and as a stocks and share investment. However, both involve bonus cash from the government as a reward for saving and buying a home.
The Lifetime ISA will allow people to save up to £4,000 per year, and for every £4 saved, the government will give you a bonus of £1. This bonus will become available when you cash in the ISA to buy your first home or when you hit 60, aka, pension age.
The scheme serves to help on two fronts, helping either with a deposit for a home or for retirement. The deposit factor is a big one in today’s market, and one which will attract a lot of attention.
It will be up for the individual to decide whether they think it is worth more than the Help to Buy ISA.
With house prices out of reach of the average first time buyer, and people trapped renting, any boost to savings, especially ones moulded around the idea of buying a house will be a huge help to those caught in the renting trap.
