Young adults in Leeds could be missing out on thousands of pounds in free government money due to a lack of awareness about the Lifetime ISA (LISA) scheme, according to new research.
A study by Opinium found that nearly half of 18-34 year olds in the city don't understand how the savings account works, potentially costing them up to £32,000 in lost bonuses over their lifetime.
How the Lifetime ISA Works
The government-backed scheme allows savers aged 18-39 to deposit up to £4,000 annually, with a 25% bonus added on top. This means:
- Maximum annual bonus: £1,000
- Potential total bonus over lifetime: £32,000
- Funds can be used for first home purchases or retirement
The Leeds Savings Gap
Emma Watson, a financial expert from Leeds, explains: "Many young people here are focused on short-term savings goals or simply don't realise this opportunity exists. With house prices rising, that £1,000 annual bonus could make all the difference."
The research shows:
- 47% of young Leeds residents don't understand LISAs
- Only 22% currently have one open
- 31% believe they can't afford to save the maximum amount
Making the Most of Your LISA
Financial advisors recommend:
- Opening an account before age 40 to maximise benefits
- Setting up regular monthly deposits
- Considering stocks and shares LISAs for long-term growth
- Checking provider fees before choosing an account
With the average Leeds first-time buyer needing a £28,000 deposit, the LISA bonus could cover over a third of this amount for consistent savers.
