Martin Lewis has issued an urgent alert for anyone born between 1987 and 2008 to deposit just £1 into a Lifetime ISA (LISA) now, warning that future rule changes could prevent them from opening one later. The Money Saving Expert appeared on ITV's This Morning this week to explain why a minimal deposit today could prove enormously worthwhile.
Why a £1 Deposit Matters
Lewis encouraged all those aged 18 to 39 who do not already have a Lifetime ISA to open one with as little as £1. He highlighted that providers such as Moneybox and Plum allow accounts to be opened with this minimal amount. He said: "Aged 18 to 39, if you don't have a Lifetime ISA, put a quid in it. You need to do more reading whether you should be actually using it and putting real money in, but the big warning, one pound. I want everyone aged 18 to 39 to have one pound in a Lifetime ISA so that if it becomes useful to you in future when you can no longer open it, you have the facility."
His advice comes amid a government review of the UK's ISA framework, which has sparked speculation about potential reforms to Lifetime ISAs. Lewis warned that rules could change "sometime next year," meaning those who delay may lose the chance to open an account if eligibility criteria are revised.
Current Rules and Benefits
According to GOV.UK, only individuals aged 18 to 39 can open a Lifetime ISA. Once opened, contributions can continue until age 50, provided the account was created while the holder met eligibility requirements. Savers can contribute up to £4,000 per tax year and receive a 25% government bonus, worth up to £1,000 annually. Funds can be used to purchase a first home valued at up to £450,000 or accessed once the account holder reaches 60. Withdrawals are also allowed in cases of terminal illness.
However, accessing funds for any other purpose typically incurs a 25% withdrawal penalty, meaning savers could receive less than their original contributions. Lewis addressed this, noting that someone opening an account with just £1 would only risk losing approximately 6.25p if they later withdrew. He described this as a negligible cost for securing access to the account.
Additional Reason: First Home Bonus
Lewis also highlighted another advantage: to be eligible for the government bonus when purchasing a first home, the account must have been active for at least 12 months. He said: "To use a Lifetime ISA on a first-time property, it has to be open a year. So if you put a quid in now and you suddenly decide you're buying a house next year, you could then put four grand in and you get the £1,000 bonus. But if you only started to open it next year, you couldn't do that. So there's another reason for having money in there."
Lewis urged all eligible individuals to act promptly, emphasising that a £1 deposit now could secure access to valuable savings benefits in the future.
