Martin Lewis has urged anyone born between 1987 and 2008 to deposit just £1 into a Lifetime ISA (LISA) today, warning that failing to act could mean missing out on future opportunities. The Money Saving Expert appeared on ITV's This Morning to explain the importance of opening an account now, even with a minimal sum, given the government's ongoing review of the ISA system.
Why a £1 Deposit Matters
Lewis highlighted that providers such as Moneybox and Plum allow customers to open a LISA with as little as £1. He stressed that this small deposit could secure access to the account for years to come. "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," Lewis said. "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."
Government Review Sparks Urgency
The advice follows the government's launch of a review into the UK's ISA system, fuelling speculation about potential reforms to Lifetime ISAs. Lewis warned that existing rules could change "sometime next year", meaning those who delay might lose the chance to open an account if eligibility criteria are revised. A Lifetime ISA can only be opened by individuals aged 18 to 39. Once opened, contributions can continue until age 50, provided the account was created while the holder was still eligible.
Benefits and Risks of a Lifetime ISA
According to GOV.UK, savers can contribute up to £4,000 per tax year and receive a 25 per cent government bonus, worth up to £1,000 annually. The funds can be used to purchase a first home valued at up to £450,000 or withdrawn after age 60. Withdrawals are also permitted if the account holder is terminally ill. However, taking money out for any other reason incurs a 25 per cent withdrawal charge, meaning savers could receive less than their original contributions.
Lewis addressed this risk during the interview, noting that someone opening an account with just £1 would only risk losing around 6.25p if they later withdrew. He maintained this was a modest price to pay for securing access to the account in case it proved beneficial down the line.
First-Time Buyer Advantage
Lewis also highlighted another key advantage: to use a Lifetime ISA for a first-home purchase, the account must have been open for at least 12 months. "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," he explained.
