The government will pay you to save for a house

Author

George Beecroft
July 18, 2025

👋 Hey guys - Noah here,

Imagine if every time you saved £4, the government chucked in an extra £1.

Sounds too good to be true?

It's not. It's happening right now. And some people are completely missing out.

If you saved £16,000 for your first flat, the government will add £4,000. That's FOUR GRAND of free money towards your deposit.

The £33,000 House Deposit Hack

It's called a Lifetime ISA (LISA). And if you're saving for your first home, it's literally free money.

Here's how it works:

  • You save up to £4,000 per year

  • The government adds 25% on top

  • That's up to £1,000 FREE every single year

  • You can use it all for your first home deposit

Do this from age 18 to 28, and you've got £10,000 of government money. Plus your £40,000. Plus any growth from investments.

That's a £50,000+ deposit.

Who Can Get The LISA Bonus Money?

You qualify if:

  • You're aged 18-39

  • You've never owned property before

  • You're buying a home under £450,000

  • You're buying in the UK

Once you've opened one, you can keep paying in until you're 50. The government keeps adding that 25% bonus every year.

Small Amounts Add Up

Let me show you the maths:

Save £333 per month:

  • You save: £4,000 per year

  • Government adds: £1,000 per year

  • Total after 5 years: £25,000

  • Total after 10 years: £50,000

Save £100 per month:

  • You save: £1,200 per year

  • Government adds: £300 per year

  • Total after 5 years: £7,500

  • Total after 10 years: £15,000

Even if you can only save £50 a month, you're still getting free government money!

LISA vs Help to Buy ISA

But what about Help to Buy ISAs?

Help to Buy ISAs closed to new accounts in 2019. If you've got one, great. But for everyone else, LISAs are your only option.

And honestly? LISAs are better anyway:

  • Higher annual limit (£4,000 vs £2,400)

  • Bigger maximum bonus (£33,000 vs £3,000)

  • Can be used on homes up to £450,000 (vs £250,000 outside London)

How to Open One (Takes 10 Minutes)

Step 1: Choose Your LISA Type

Cash LISA = Your money sits in cash, earning interest Stocks & Shares LISA = Your money gets invested for potentially higher returns

If you're buying in 5+ years, consider stocks & shares. Less than 5 years? Stick with cash.

Step 2: Pick a Provider

Best Cash LISAs:

  • Moneybox: 4.76% interest

  • Plum: 4.75% interest

Best Stocks & Shares LISAs:

  • AJ Bell: Low fees, huge fund choice

  • Hargreaves Lansdown: Great app, good for beginners

  • InvestEngine: Simple ETF investing

Step 3: Open Your Account

You'll need:

  • Your National Insurance number

  • Bank details

  • Valid ID

  • About 10 minutes

Step 4: Set Up Monthly Payments

Even £50 a month gets you started. You can always increase it later.

The Catches (Because There Are Some)

There are some rules you need to know:

  1. You MUST use it for your first home or retirement

  2. If you withdraw for any other reason, you lose 25% (more than the bonus!)

  3. You have to wait 12 months before using it for a house

  4. The property must be your main residence

But if you're serious about buying your first home? These aren't really catches. They're just the rules of the game.

Start TODAY

Every day you wait is free money you're missing out on.

If you're 25 and start today, you could have £32,000 by 35. If you're 35 and start today, you could have £15,000 by 40.

The best time to start was yesterday. The second best time is right now.

Finding it hard to save for your LISA? The trick is knowing exactly where your money goes. Snoop tracks all your spending automatically and shows you where you can cut back. It even alerts you to bills you're overpaying and finds you better deals. Perfect for freeing up cash for your house deposit.

Let me know if you've opened a LISA - always love hearing from people taking action on their finances!

All the best, Noah