Martin Lewis reveals how to get £1,000 a year free with a specific bank account
MARTIN Lewis has revealed how to get up to £1,000 a year in free cash from the government.
The consumer champion shared the tip on the latest episode of his ITV Money Show.
Mr Lewis explained how you can get extra cash help from the government through a Lifetime ISA (LISA) account.
The accounts can be opened between 18 and 39 and used to buy your first home or for retirement.
You can add up to £4,000 a year to the accounts until you’re 50 and the government adds a 25% bonus, up to a maximum of £1,000 a year.
So the top bonus you can get from the government is over £30,000 if you open your ISA at 18 and add the highest amount every year until 50.
If you don’t use the money you’ve put into the account for your first property, or you withdraw it before you reach 60, you have to pay a charge.
You also can only get a bonus after putting money in for at least a year.
Mr Lewis explained: “A Lifetime ISA can be opened between age 18 and 39.
“As a first time buyer the state will give you a 25% boost on money you put in.
“You can put up to £4,000 a year (in) so that’s up to a grand year bonus from the state.”
But, Mr Lewis warned: “Lifetime ISAs have a 6.25% withdrawal penalty if you’re not using them to buy a qualifying house or you’re aged under 60 when you take the money out.
“So, you only want to put them (money) in if you’re definitely going to be buying a qualifying house.
“And you have to have had them for a year before you can get the bonus.”
It’s worth noting Mr Lewis has previously warned households about LISAs and urged the government to update the eligibility rules.
The LISAs maximum eligibility property value hasn’t increased from £450,000 since the scheme was launched in 2017.
But the average UK property price has risen by 35% in that time.
According to MoneySavingExpert.com, if the threshold had risen, it would now be £607,500.
So savers looking to buy a home that no longer qualifies have to pay the 6.25% penalty to get their money out.
Also on the show, Mr Lewis shared how households on Universal Credit can get extra help from the government through the Help to Save scheme.
You can also benefit from the scheme if you receive Working Tax Credits.
If you are on Universal Credit, your take-home pay needs to be £658.64 or more in the last monthly assessment period to be eligible.
Under the scheme, the government gives you a 50p bonus for each £1 you save for up to four years.
You can save a maximum of £50 per calendar month.
So if you put the maximum £50 in each month for four years, you would get a £1,200 bonus from the government.
Mr Lewis explained: “It’s really worth accessing.
“It is for people who are on Universal Credit or have low incomes.
“Not everyone will qualify, but it is worth checking.”
Mr Lewis added you will get the 50% bonus on the highest amount you had in your account at one time.
So if you had £600 in there at one time, but had to use it all to repair a broken window and didn’t add more money in, you would still get a £300 bonus from the government.
What other schemes are there if I’m looking to buy a first home?
If you are looking to get help buying your first home there are a number of schemes beyond opening a LISA.
There’s the Mortgage Guarantee Scheme, where buyers can buy a home with a 5% deposit. The scheme runs until December 31.
Meanwhile, there’s the Shared Ownership scheme which allows people to buy a portion of a property and pay rent to a landlord on the rest.
Or, the First Homes scheme can help buyers bag a home with a discount of up to 50%.
But the discount will stay with the property forever so means you won’t get the full value of it when you come to sell.
We’ve compiled a comprehensive list of schemes to help first-time buyers.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk