Savers who opened a Help to Buy individual savings account (Isa) have less than five months to transfer it into a Lifetime Isa (Lisa) and receive an extra government bonus and extended Lisa allowance.
The Lisa was launched on 6 April this year to help buy a first home or save for retirement. Up to £4,000 can be saved into a Lisa each year, up until age 50, and those saving into one will receive a government bonus worth 25 per cent of their contribution a year – up to £1,000. The Lisa can be used to buy a first home worth up to £450,000, or left invested until age 60. The annual £4,000 Lisa allowance counts towards your overall annual Isa allowance, which is £20,000 for the 2017-18 tax year.
The Help to Buy Isa was launched in 2015, also to help buy first homes worth up to £450,000 in London and up to £250,000 outside London. You can save up to £3,400 in the first year of opening a Help to Buy Isa and £2,400 each year afterwards. You receive a government bonus worth 25 per cent of your contribution up to a maximum of £3,000, but do not get any government bonus for savings of less than £1,600.