Money expert shares ‘great way’ you can boost savings by £5,050 this year | Personal Finance | Finance

Lifetime ISA

Ms O’Brien explained: “When building yourself a savings plan, the first thing to consider is what this money will be going towards. If it is for a first-time house deposit or retirement, then opening a Lifetime ISA is a good option to consider. 

“This is because if your goal is to have £5,000 put away each year, you actually only need to save £4,000 of your own money.

“The Government will add a 25 percent tax-free bonus, meaning savings of £4,000 will automatically be topped up by an extra £1,000 each year. This is ideal if you’re wanting to save £5,000 exactly as the maximum you can deposit into a Lifetime ISA is £4,000 a year.”

However, people should always be aware money from a Lifetime ISA can only be withdrawn without a charge if a person is buying their first home, or if individuals are over 60.

Those who want to withdraw for other reasons will be hit with a 25 percent penalty – which could cost more than the Government added in the first place.

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