16 Mar 2016

The Budget-what it might mean for generation rent

The Budget was delivered by chancellor, George Osborne today, 16th March 2016. I was interested to see if there would be any measures that might be of interest to 'generation rent'.

The chancellor introduced an 'Individual Savings Account' (ISA) called the 'Lifetime ISA' which will take effect from April 2017. If you are under 40 years of age you could put up to £4,000 each year into the 'Lifetime ISA'.  The government would then top-up your savings by 25%. This can continue until a person eligible for the 'Lifetime ISA' reaches the age of 50. However, there are terms and conditions attached to the 'Lifetime ISA' so take the time to read about them before making a decision. 

For many of 'generation rent' the introduction of the 'Lifetime ISA' gives an opportunity to save for a house or a pension or both. I know not many people in this age group will have £4,000 spare cash every year to take advantage of saving towards a house or a pension or both, but £4,000 is the maximum that can be put in each year so you can put less money in and still take advantage of a government top up. For instance if you were to deposit £1,000 into the 'Lifetime ISA' the government would contribute another £250.

Also, if you already have a 'Help to Buy ISA' your funds in this can be moved to the 'Lifetime ISA'.  

I think that the 'Lifetime ISA' sounds a good opportunity to encourage young people to save to buy a house and also save for their future. Having said that, for generation rent the 'Lifetime ISA' may remain just an opportunity, as so many of generation rent continue to struggle to pay off debts or the money they do have has to pay the rent.  However any scheme where the government offers to give money has to be worth considering!!!! 

You will be able to find information on The Budget 2016 at 'GOV.UK'-www.gov.uk

The writer of http://generationrent.blogspot.co.uk/ has no legal training and the articles in this blog are for guidance only.

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