Martin Lewis says 'without any doubt' and explains how Brits can get free £1,000 payment

Brits can get £1,000 towards their first home with a saving trick, Martin Lewis has shared. The MoneySavingExpert founder issued the advice on his ITV show where he covered a range of topics including Department for Work and Pensions (DWP) benefits and Ofgem's energy price cap.

On the show, Martin was asked where the best place for someone aged 18 to save money towards a house deposit was. He responded that "without any doubt" the first place to look was the Lifetime ISA savings account.

The 52-year-old explained that the Lifetime ISA or LISA is a tax-free savings account in which the government gives you a 25 per cent bonus on your savings. "People can open a LISA on the day of their 18th birthday, and they can open one until the day before their 40th birthday," he said.

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"That is the very last time they can open one, and once it's open, it stays open. When you can open it, it gives you a 25% boost on what you put in. So if you put in £1,000 in one month, the state will add £250 pounds that month, and that will be sitting in your lifetime ISA account.

"That amount will get interest on top of it as well, and it will keep doing that until you're age 50. As they have been around since 2017, the oldest people with LISA's are 46, so we've not yet hit it, so they're still getting that 25 per cent contribution.

"The most you can put in per tax year is £4,000, which means you can get up to £1,000 free per year, and you get that each year. So if you had it for 10 years, you would have £10,000 free from the state."

Martin warned that there were some "caveats" with the LISA. The first was that if you withdraw your cash for for any reason other than your first home or retirement, you'll be issued with a 25 per cent withdrawal penalty, which not only wipes out the bonus but also part of your original savings, The Mirror reports.

He added: "Now, you might think you've got a 25 per cent bonus on the 25 per cent off which means you come out with the amount that you put in. That's not the case, if you have £10,000, you will have £12,500 with the bonus, but if you take it out, you end up with £9,075. So you put ten grand in but end up with £9,075 because of the penalty."

If you’re planning on using it to purchase a property, your new home can’t be worth more than £450,000, which Martin says can become an issue, particularly if you live in London. Martin also warned that you are only eligible for the bonus if you have had the LISA for over one year.

He said it is "important" for young people to open them sooner rather than later. He added: "If you're aged between 18 and 39 and you've not got a LISA and you haven't bought a property, go and put £1 in one. Even if you don't want to save for a first property.

"Why? Because the clock is ticking, when you are ready to put money in, you could put £4,000 in and get £1000 straight away. Parents of people aged 18, 19 or 20 go and give them a £1, they will still take it, and tell them to open a LISA because it will then be there, ready and waiting."

Brumwish 2024 - buy a gift for a child in need

BrumWish 2024 is Birmingham Live's festive drive to get thousands of gifts to children and young people across our city - among them the homeless, the vulnerable, kids in care, kids who are poorly or struggling, and kids who have little.

There are THREE simple ways to help.

1. Buy a new gift from the Brumwish 2024 Amazon giftlist. In just a click your donation will be whizzing its way to our volunteers at Edgbaston Stadium.
2. Donate money to the appeal fund hosted by Thrive Together Birmingham - this will help pay for gifts for kids with specialist needs or specific wishes.
3. Buy a gift and, even better, rope in friends, neighbours and workmates to do the same, then drop off your pressies at Edgbaston Stadium, Edgbaston Road, B5 7QU on Friday 6th December, 10am - 3pm; Saturday 7th December, 10am - 1pm; or Monday 9th December, 10am - 1pm. Volunteers will be there to help you. Please don't wrap your gifts. You can also drop off by arrangement until Monday 16th December - contact Louise on 07469 979286.

Thanks to our partnership with #Toys4Birmingham, every single gift will find a good home in the loving care of a child living in B&Bs or hotels, hostels or refuges, children receiving support from specialist organisations and charities, and families being supported by children's centres and charities around the city.

Making up the Brumwish and Toys4Birmingham gang are Thrive Together Birmingham, Birmingham Playcare Network, Warwickshire Cricket Foundation (the charitable arm of Warwickshire County Cricket Club), Birmingham Forward Steps and BirminghamLive/Birmingham Mail.

Thank you to Amazon UK and the amazing team at the Sutton Coldfield depot for their support.