The bill will:
introduce the Lifetime ISA, where people aged from 18 to 40 will be able to open an individual savings account to which they can contribute up to £4,000 each year up to age 50, and receive a government bonus of 25% on those contributions. The Lifetime ISA account holders will be able to access their funds in full to buy their first home (worth up to £450,000), from age 60, or if terminally ill. Funds withdrawn in other circumstances will be subject to a 25% charge, which returns the government bonus element (including any interest or growth on that bonus) and applies a small additional charge to ensure the product is used for long-term saving.
introduce Help to Save, which will be open to working people in receipt of Universal Credit and have a minimum weekly household earnings equivalent to 16 hours at the national living wage or Working Tax Credit. It will work by providing a 50% government bonus on up to £50 of monthly savings into a Help to Save account. The bonus will be paid after two years, with savers able to continue saving for a further two years, meaning that people can save up to £2,400 and benefit from government bonuses worth up to £1,200.
Published 17 October 2016