09 Mar 2017
Spring Budget 2017: Three new ways to save for your first home
Three new ways of saving are being introduced by the UK Government, starting next month.
Chancellor Philip Hammond's Spring Budget speech was light on new measures for the property market. However, there are a number of previously-announced schemes about to kick-off.
Lifetime ISA
The UK Government will soon launch its new 'Lifetime ISA' saving scheme which could see young savers earn bonuses of up to £1,000 a year.
From the 6th of April, savers aged between 18 and 40 will be able to put as much as £4,000 away each year and receive a government-backed payout of 25%.
They then have two choices with the money - keep it in the saving pot until they turn 60, or access some or all of the cash to buy their first home.
There will be no monthly limit on contributions and the government will pay the bonus up until the account holder turns 50.
This means a saver who is 18-years-old when the scheme starts next month could benefit from up to £32,000 from the government.
You can fin out more about the Lifetime ISA with our special guide.
Help to save
Help to Save, which will follow the Lifetime ISA in 2018, is aimed at supporting people on low incomes to build up their savings.
It carries a 50% government bonus on savings up to £50 a month for up to four years. Help to Save will be available through NS&I to any adult who is receiving working tax credit, or Universal Credit with minimum household earnings equivalent to 16 hours a week at the National Living Wage.
To encourage people to save as much as they can, the bonus will be based on the highest balance achieved in the account, not the standing balance. The Government estimates that roughly four million people could benefit from this new scheme.
New saving bond
Mr Hammond also confirmed a three-year NS&I Investment Bond with a market-leading interest rate of 2.2%.
The bond will be available for 12 months from April 2017.
The government announced the NS&I Investment Bond at Autumn Statement 2016. It will be open to everyone aged 16 and over with the flexibility to save between £100 and £3,000 over three years.
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