Britons may be eligible for a 25% savings boost, but there is a ‘catch’.
It has been suggested that channeling regular contributions into a Lifetime ISA (LISA) will help savers with a housing deposit.
Due to low interest rates, savers have had a difficult time recently, and those saving for a home face similar issues. In light of this, Greg Wilson, the creator of Quotezone, offered tips to first-time purchasers and those looking to save money.
“With the Bank of England dropping interest rates to a record low during the height of the pandemic, the amount of interest people can receive from a basic savings account isn’t going to help them save for a deposit very much,” he said.
“A much better choice is to put monthly contributions into a Lifetime ISA (LISA), which gives first-time homebuyers a hefty 25% bonus on their funds when they’re ready to buy.
“The catch is that LISAs are only available to savers under the age of 40, and they are limited to £4,000 in annual savings.”
While the government’s recent introduction of a 95% mortgage is meant to assist “generation rent” become “generation buy,” UK property prices are currently rising at their quickest rate since 2004.
With the stamp duty holiday coming to an end, ‘generation rent’ will need a mortgage of more than 95% to climb on the home ladder.
Generation rent refers to those between the ages of 18 and 40 who have been priced out of the property market as a result of increasing house prices, limited wage growth, and a high cost of living.
“We’d recommend that first-time buyers focus on eliminating any non-essential expenditures from their budgets when it comes to figuring out how to save enough money into the LISA to build up the lump sum required for a deposit,” Mr Wilson added.
“I’m also lowering the cost of basic outgoings and putting the savings into a LISA.
“First-time buyers may use a financial comparison site like Quotezone to locate cheaper car insurance, contents insurance, and utility bills, then set up standing orders to transfer those savings into the LISA automatically.
“This way, the saver’s outgoings aren’t affected, yet they’re still putting money into their LISA on a monthly basis.”
House prices in the UK have grown by 5.7 percent since the outbreak, according to “Brinkwire Summary News.”