Martin Lewis shared an easy tip people can use to qualify for a savings account boost worth up to £1,000 per year – and just £1 is needed to start.
Taking to TikTok earlier in the year, the Money Saving Expert founder explained the perks of a Lifetime ISA (Individual Savings Account), including why it’s better to open one sooner rather than later. Mr Lewis said: “If you’re aged 18 to 39 and you’ve never owned a house, then get £1 in a Lifetime ISA now – assuming you don’t already have one.
“A Lifetime ISA is a savings product where you can save up to £4,000 a year, and the state adds 25% on top towards a qualifying first home.”
This means savers can be handed a boost worth up to £1,000 a year from the Government, based on the maximum £4,000 contribution.
However, Mr Lewis pointed out: “There’s a rule that says it has to have been open for a year before you can get that bonus. That bonus is worth up to £1,000 a year for you.
“You want to have the facility, so putting in just £1 now – even if you’re not ready to use it – means when you are ready to use it, the clock will have been ticking, you would have had it open a year, so you’re perfectly eligible to suddenly go and get the bonus when you want. In fact, parents, on your kids’ 18th birthday, why not get them a LISA and put £1 in it?”
Mr Lewis pointed out that the LISA has its “pros and cons”, noting that “there are some holes in it”.
However, he continued: “But it’s absolutely worth making sure you have the facility to open a Lifetime ISA set up and running as quickly as possible. And if it all goes wrong, the worst that can happen is you have to pay a 6p fine to take your £1 out at the end. I think it’s worth it. »
To open and continue to pay into a Lifetime ISA, people must be resident of the UK unless they’re a crown servant (for example, in the diplomatic service) or their spouse or civil partner.
While the scheme offers attractive incentives, it comes with strict rules. Withdrawals are penalty-free only if used to buy a qualifying first home (up to £450,000) or for retirement after age 60. Otherwise, savers face a 25% penalty on withdrawn funds.
The property must also be bought at least 12 months after the first payment into the LISA is made.
People must also use a conveyancer or solicitor to act for them in the purchase – the ISA provider will pay the funds directly to them. People must also be buying with a mortgage.
It’s also important to note that when savers turn 50, they will not be able to pay into their Lifetime ISA or earn the 25% bonus. The account will stay open, and the savings will still earn interest or investment returns.
The rules have garnered widespread criticism in recent years. The tough regulations, combined with soaring house prices, have left first-time buyers facing thousands of pounds worth of fines each.
In response, the Treasury Select Committee launched an inquiry to assess whether the LISA remains fit for purpose, publishing its findings in June 2025.
The report raised concerns about the product’s effectiveness, highlighting issues such as the potential for unsuitable investment strategies, the unfair 25% withdrawal charge, and the possibility that LISAs may be subsidising home purchases for wealthier individuals at a high cost to taxpayers, urging the Treasury to evaluate its use across different income groups.
Chair of the Treasury Select Committee, Dame Meg Hillier, said: “We are still awaiting further data that may shed some light on who exactly the product is helping. What we already know, though, is that the Lifetime ISA needs to be reformed before it can genuinely be described as a market-leading savings product for both prospective homebuyers and those who want to start saving for their retirement at a young age.”
