In this current day and age, saving for a first home can be a real challenge.
But a man has recently taken to TikTok to share a vital tip that could help boost savings.
Cameron Smith, who runs the TikTok @cazzatime, told his followers he had opened a Lifetime ISA with an app called Moneybox, a useful tool for savings and investments.
This allows him to get a 25 percent bonus on everything he saves in the account, greatly increasing his annual savings.
He went on to say that if he saved the maximum of £4,000 a year, he would get a free £1,000 from the government.
Cameron currently saves £200 a month, meaning that he gets a £50 bonus each time. He has so far saved the maximum £4,000 for this tax year and has received a total of £1,000 in bonuses.
He added that he is helped by the current 2.75 percent interest rate.
Cameron pointed out that both people in a couple can open their own Lifetime ISAs, even if they want to purchase together.
The TikToker explained that between him and his partner, they have combined savings of around £7,500, meaning that they can use this money for a deposit on their first home together.
The limit for buying a first property with a Lifetime ISA saving is currently £450,000.
TikTok users took to his comments, agreeing with his claims.
One user asked if the account was only useful during house purchase, to which Cameron responded and explained that it can also be used for retirement as well.
You can watch more videos by Cameron via Instagram at @cazza_time or on TikTok via @cazzatime.
What is a Lifetime ISA?
A Lifetime ISA is an individual savings account that can be used to help buy a first home, or to save for later in life. Savers can put up to £4,000 in their account each year, and the government then adds up to 25 percent to the savings annually.
To open an account, a person must be between the ages of 18 and 40, and account holders can deposit money into it until they’re 50.
If a saver wishes to withdraw money froma Lifetime ISA, they must be buying their first home, over the age of 60, or terminally ill. People are able to take out money outside of these reasons, but they must pay a withdrawal charge of 25 percent.
If it is withdrawn for buying a first home, the property must cost £450,000 or less, and it must be bought with a mortgage. Savers must also wait a minimum of 12 months after opening their Lifetime ISA before purchasing their first home.
