First-time buyers saving over £50,000 on home deposits through isa

LIFETIME ISAS WERE LAUNCHED BY THE GOVERNMENT BACK IN 2017 TO HELP FIRST-TIME BUYERS AND RETIREES. 09:11, 22 May 2025 The UK’s top Lifetime ISA (LISA) savers were able to put more than

£50,000 in tax-wrapper savings towards the cost of their first home, according to the latest annual figures. This information came from a new Freedom of Information (FoI) request made by the

money app Plum, showing that savers are amassing a serious amount of money through the government-backed savings accounts. LISAs work by the government adding a 25% bonus to your savings,

up to a maximum of £1,000 per year. READ MORE: MARTIN LEWIS URGES MOBILE PHONE OWNERS TO LOOK OUT FOR TEXT WHICH COULD MEAN BILL CUT You can put up to £4,000 each year into the account until

you're 50, meaning if you're hitting the maximum savings each year, in 10 years you'll have gained £10,000 in bonuses. Data released by HMRC in response to Plum’s FOI request

has revealed the top 25 withdrawals made to buy a home in 2022-23 averaged £51,000 – meaning the top saver’s pot will almost certainly have been far greater. Article continues below

According to the figures, 42,810 First Time Buyers (FTBs) used LISA pots in excess of £10,000 to get their foot on the housing ladder. Of these, 11,280 built home deposits greater than

£20,000. The average withdrawal to buy a home was £13,877. News of the £50,000+ pots emerged as Plum launched its own LISA with an interest rate of 4.75% – currently the most attractive cash

rate on the market. Rajan Lakhani of Plum said: “It was Albert Einstein who said that compounding was the eighth wonder of the world, and who are we to argue given the impressive size of

these Lifetime ISAs. “There are very few savings options that offer a guaranteed top-up of 25% on your annual contribution. Against a backdrop of recent global volatility, it’s reassuring to

know the Lifetime ISA can deliver stunning gains regardless of the broader economic outlook. “And don’t forget that this government boost comes in addition to any interest you earn on

savings. “A LISA saver maxing out their annual allowance could reasonably expect to amass a sum of £50,000 in approximately eight-and-a-half years assuming annualised interest of 4%. Article

continues below “A couple, however, could do it in around four-and-a-half years, or alternatively save £100,000 together in around eight-and-a-half years. “That’s a huge chunk off the cost

of the average first-time buyer UK home – which currently stands at around £311,034.”