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With 2016/2017 year-end fast approaching, we take this opportunity to highlight to you how you could save for your first home or for retirement with the new Lifetime ISA launching on 6 April 2017. Discover how as a first-time buyer you could receive 25% bonus on top of your savings, what the difference is between the Lifetime ISA and Help to Buy ISA and, which one is most appropriate for you:
The Lifetime ISA is to launch on 6 April 2017 and it has two specific objectives: to help first-time buyers and, to assist those saving for retirement. A juxtaposition it may seem but behavioural economics suggests that this solution will help everyone. Once a first-time buyer has bought a home they are able to continue the ISA towards their retirement.
Here are the key points of the Lifetime ISA:
Note, that if you turn 40 on 6 April 2017, you are not eligible to open a Lifetime ISA.
The Lifetime ISA for first-time buyers sounds very similar to the Help to Buy ISA which was launched in December 2015 but there are fundamental differences between the two. Before, going into them, it is important to note that you are able to have both a Help to Buy ISA and a Lifetime ISA. However, you are only able to use the bonus received from one of them towards purchasing your first home.
Here is a comparison table from Money Saving Expert on the differences between the Lifetime ISA and the Help to Buy ISA:
Understanding which ISA to buy is difficult to explain due to differing circumstances and that the public information is currently only a provisional guide. Nonetheless, watch the video below of Money Savings Expert, Martin Lewis clarifying the Lifetime ISA and Help to Buy ISA differences into easy to digest information: