Martin Lewis urges parents to spend £1 on their child now – to get future bonuses
Aneira Davies
Social and newsletter writerPaying in a quid now could help secure your child's future AND get them free money, the Money Saving Expert explained
Martin Lewis has urged parents to spend £1 now to future-proof their child's finances, or risk missing out on extra government help.
The Money Saving Expert told families that if they spend a little cash now they could reap the rewards when it comes to when their child – or they – want to buy a house in the future.
Even if they haven't yet got the money for the purchase.
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'Get a quid in now'
Speaking to ITV's This Morning on Tuesday 20 February, Martin told viewers that they (or their adult children) should put £1 in a Lifetime ISA immediately, to ensure that they'll be able to use a government scheme that will give them extra cash towards their house deposit.
The Lifetime ISA, or LISA, is designed to help someone buy their first home or save for later life and can pay out a bonus of 25% on top of what you've already saved.
Anyone using one can pay in a maximum of £4,000 a year into the Lifetime ISA, meaning the government could give you £1,000 extra for free.
But even if you save a smaller amount, you'll still be able to get some free cash.
Urging parents that they can also save up towards the Lifetime ISA for their kids now (but that their children will have to open the ISA themselves when they're old enough), Martin explained:
'Anyone over 18 who one day wants to buy a house, get a quid in a Lifetime ISA now.'
'The obvious place to start'
Martin said that, for anyone between the ages of 18 and 40, a LISA is 'the obvious place to start'.
He said: 'For most people, young people, especially if they're interested in buying a house, a Lifetime ISA is the obvious place to start.
'And, just a really important tip here. To get the property bonus on a Lifetime ISA, you need to have had it open for a year.'
He went on: 'So, anybody aged 18 and above, up to the age of 40, who has not bought a house and may one day want to buy a house, or maybe a parent doing it for them, put a quid in now.'
While parents cannot open a LISA on behalf of their children – something Martin has explained previously – they can start saving money to help their children once they turn 18 and open one themselves.
'Get a quid in a Lifetime ISA now'
Martin added: 'Even if you haven't got money to save for a house, open one with a £1, Money Box is the top payer, Tempo's just behind it.
'Open one with a £1 now, because then, tick tock tick tock, the clock is ticking so that when you do want to use it, you'll probably have already had that year that you need to have it open before you get the bonus, so you could then put more money and activate the bonus straightaway.
'So anyone over 18 who one day wants to buy a house, get a quid in a Lifetime ISA now.'
But Martin also warned that the LISA has to be used on buying a house IF you want the property bonus, otherwise you could end up losing out.
He told the ITV show that withdrawing the cash for any other reason could see you forfeit 25% of the money you've saved instead.
He added:
'The state adds 25% on top of what you've saved. You can put a maximum of four grand a year, so that means £1,000 of free money from the state each year for up to 31 years.'
'I'd strongly urge'
It's not the first time that Martin Lewis has issued a similar warning to parents, as he 'strongly urged' parents' to spend £1 on their kids back in January.
He said, on Twitter, that this was a way many could get '£1,000s free towards your first home' and urged:
'Please share with anyone under 40 who's not bought a home.'
However, in response to someone who asked if they could open a Lifetime ISA, or LISA, for her three children, Martin replied:
'No. Lifetime ISAs are a policy for adults, you must be aged 18 to 39 to open one.
'However,' he advised, 'you can give them money to open one though.
'And I'd strongly urge parents, especially of those just hitting adulthood to ensure they plonk a minimum £1 in an LISA.'
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