Labour has confirmed that households could receive a £1,000 bonus through the Lifetime ISA scheme, offering first-time buyers an instant 25% return on their savings. Sarah Coles, head of personal finance at AJ Bell, urged those delaying a home purchase to consider this opportunity.
How the Lifetime ISA Bonus Works
Under the scheme, eligible first-time buyers aged 18 to 39 can save up to £4,000 each tax year. The government adds a 25% bonus, worth up to £1,000 annually, provided the funds are used for a first home or retirement. HMRC confirmed this effectively gives savers an instant 25% return.
Coles said: “If you're in this position, it's a golden opportunity to consider your savings. Not only will building your savings potentially put you in a better position when you're buying, but having a robust safety net is essential to get you through the expense of a move, and the inevitable extra costs when you move in somewhere new.”
Market Context and Advice
Current sales remain “bang in the middle of the pack” compared with the past decade, reflecting deals agreed earlier this year before geopolitical tensions unsettled financial markets. Coles added that those thinking about waiting longer to purchase a home could even consider investing their money through a Stocks and Shares ISA or by using a Lifetime ISA to benefit from the 25% government bonus.
The real picture emerges in the monthly figures, with a second consecutive small monthly drop, she noted. The scheme is available to those opening a new account between ages 18 and 39.
