Money expert Martin Lewis has issued an urgent warning for savers aged 18 to 39: put £1 into a Lifetime ISA (LISA) before the government changes ISA rules. Speaking on The Martin Lewis Podcast on BBC Sounds and Spotify, Lewis explained that the government is consulting on replacing the LISA with a new First Time Buyer ISA, which could close the LISA to new applicants.
Why £1 Now Matters
Lewis stressed that opening a LISA with just £1 now ensures you can continue using it even after the new ISA launches. “This is an important warning for anybody aged 18 to 39,” he said. “If you do not have a Lifetime ISA, get £1 in one now.” The LISA currently offers a 25% government bonus—up to £1,000 per year on deposits of £4,000—for buying a first home (under £450,000) or for retirement savings from age 60.
Potential Rule Change
The proposed First Time Buyer ISA would be restricted to house purchases only, removing the retirement option. However, those who already hold a LISA may be able to keep it and also open the new ISA. “When they do [replace it], they’ll close the LISA down to new applicants,” Lewis warned. “But if you’ve already got one open, even with just a quid, you can continue to use it.”
Double Bonus Opportunity
Lewis noted that for first-time buyers, you could potentially receive bonuses from both the LISA and the new First Time Buyer ISA. For retirement savers, the LISA may still be useful for those who are self-employed or cannot contribute to a workplace pension, though Lewis added it “isn’t normally as good” as a workplace pension.
The Martin Lewis Podcast from June 25 is available on BBC Sounds, Spotify, and Apple Music.
