First Time Buyers failing to take up Government Bonuses, survey finds

First Time Buyers failing to take up Government Bonuses, survey finds

Matthew Barrand Investment

One in three adults under the age of 40 are saving to buy their first home and get a foot on the property ladder, but research from Cushon has found that less than half (44.1%) are taking advantage of top up bonuses offered by the government.

The workplace savings and investment provider revealed that of those saving to buy their first home, only 13.2% are saving into a Lifetime ISA, while 30.9% are putting money into a Help to Buy ISA – the Lifetime ISA’s predecessor.

Of those surveyed who are saving to get onto the property ladder, 31.8% indicated they are saving into an instant access account, while 25.5% said they are saving into a fixed rate savings account. One in five (20.5%) are saving into a cash ISA while another 7.7% are saving into a stocks and shares ISA.

With interest rates at an “all time low” a Lifetime ISA would help savers get onto the housing ladder quicker.

The Help to Buy ISA was closed to new applicants in November 2019 but the Lifetime ISA currently offers a 25% government top up bonus up to £1,000 per year on any savings, as long as the money is used to purchase a first home or for retirement.

“With a 25% government bonus it is the ‘no brainer’ product for the under 40s looking to get on the housing ladder and could really speed up the reality of purchasing a home for a lot of young people”.