The latest research from Moneybox has revealed that potential first-time buyers passed up an estimated £9.4bn of government cash today after fewer than 2% of eligible savers opened Lifetime ISAs.
According to the report, government bonuses of up to £1,000 on LISAs are being paid for the first time after the accounts reached their first birthday. Savers aged 18 to 39 can invest up to £4,000 a year in LISAs, which attract an annual government top-up of 25% that can be put towards a deposit for a first home.
However, Moneybox analysis suggests only around 150,000 LISAs1 have been opened in the first year despite potential first-time buyers in the UK numbering in excess of 9.5 million.
That would equate to £9.4bn of free money left in Treasury coffers that could have been claimed and put towards a first home purchase.
This indicates take-up rates are still drastically low, and that becomes even more apparent when you consider how many first-time buyers step onto the property ladder each year.
The number of first-time buyers taking out mortgages in the year to February 2018 was 390,3003.
Ben Stanway, co-founder, Moneybox, commented: “First-time buyers are missing out on billions of pounds that could be going towards the dream of home ownership. Many will be saving the £4,000 needed to claim the maximum bonus elsewhere, so opening a Lifetime ISA makes perfect financial sense.
It’s been fantastic to see our Lifetime ISA customers receive their first bonuses and we look forward to helping thousands of people get their foot on the property ladder over the coming years.”