Millions of people hoping to buy their first home or fill gaps in their retirement savings have just weeks to act before the end of the tax year, consumer experts have warned.
Savers hoping to get on the property ladder or make up for a shortfall in their pension have until April to open a Lifetime ISA (LISA) to qualify for the next 12 month bonus.
This is a government scheme that pays savers up to £1,000 a year for a home or towards their retirement pot.
Speaking to subscribers of MoneySavingExpert's weekly newsletter, Martin Lewis warned: "If you hope to buy your first home in the next 10 years, put £1 in a LISA now.
"Lifetime ISAs give first-time buyers a 25% bonus (up to £1,000/year) on their savings, but only after it's been open a year. So open one with £1 now, to start the clock, so it's usable if/when needed," he added.
LISA accounts are open to anyone aged 18 to 40 – it offers a 25% bonus on your savings, capped at £1,000 a year.
But, unlike the Help to Buy ISA, you need to have had a LISA opened for a year to get the bonus, meaning it's worth depositing in £1 now, just in case you’ll need it over the next year.
Lifetime ISAs – what you need to know
You can pay up to £4,000 a year into a Lifetime ISA on any schedule you like, with the bonus paid after 12 months.
Over the lifetime of an account, you can get up to £32,000 in government cash – providing you pocket the £1,000 bonus every year.
Interestingly, LISAs let you invest in the stock market or cash. Right now, the best-payer is currently 0.85% through Moneybox.
You can then use the money to buy a home or save for your retirement.
With a Lisa you can currently buy homes up to £450,000 in London and £250,000 outside London.
However, if you choose to withdraw the cash, you may face a penalty.
Under normal rules, you’d be charged 25% of the amount withdrawn if you decided to opt out.
That's been cut to 20% until April, which in effect is simply equivalent to the bonus being taken back.
But from April 5, the penalty charge will jump back up to 25%.
We've got a full guide on how savings account work and Lifetime ISAs specifically, here.
