I was back in the Financial Times over the weekend discussing the Lifetime Isa and why it’s a serious ace up millennials’ sleeves – but only if they know how to use it. Read on to find out how to take advantage of the most generous Isa yet…
It’s easy to dismiss Isas — individual savings accounts — as being irrelevant to our generation. For many millennials, saving and investing seem like unaffordable luxuries. Those saving into the tax-free accounts tend to be older people.
The latest statistics (for 2016/17) show that only 17 per cent of Isa savers that year were under 35, but half were aged over 55. According to Scottish Friendly, the numbers of adults holding Isas fell in every age group between 2009 and 2016 except one — baby boomers.
But in 2017, the Lifetime Isa (Lisa) came along to help young people saving for a first home or investing for retirement. Open an account at age 18, subscribe the maximum £4,000 every year until you turn 50, and you could net a 25 per cent government bonus worth up to £32,000.
The total number of Lisas opened since 2017 will be revealed by HM Revenue & Customs next month, but data collected by FT Money suggests it is fast approaching 400,000.
Uptake was boosted by the closure of the comparable Help to Buy Isa last autumn, with Skipton Building Society recording a 102 per cent spike in Lisa accounts being opened in November 2019 compared to the previous month.
The Isa cards used to be stacked against young people. Now we have a major ace up our sleeve — but only if we know how to use it.