Last day for savers to get £1,000 FREE from the government

SAVERS have hours left to get £1,000 free from the government.

You have to act now to get the cash freebie before the new tax year starts on April 6.

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The benefit is for people with a Lifetime Individual Savings Account (LISA), which can be used to either purchase a first home or for retirement.

You don’t pay any tax on interest earned from these kinds of accounts and the government will top up your savings.

First-time buyers saving into a Lifetime ISA (LISA) can stash up to £4,000 into this account each year tax-free.

The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year.

That means if you save £4,000, you’ll get a £1,000 bonus, and if you put away £1,000, you’d get £250 for free.

But if you miss the April 6 deadline, you’ll miss out on that boost for the year.

The bonus is paid monthly into your LISA and your money will also accrue interest.

MoneySavingExpert Martin Lewis said last week that consumers need to either “use it or lose it”.

However, it’s important to only put in money that you can afford to stash away.

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You’ll have to pay a penalty to withdraw it for any reason other than buying your first home or for retirement.

So don’t transfer money you don’t have to spare into the savings account just because of the incentive.

Who can get a LISA?

There are also rules that govern who can open a LISA, and how it can be used.

You must be 18 or over but under 40 to open a Lifetime ISA.

When you turn 50, you will not be able to pay into your Lifetime ISA or earn the 25% bonus.

But your account will stay open and your savings will still earn interest or investment returns. 

To withdraw the money, you must be buying a first home or retiring, otherwise you will lose your bonus and pay a 25% penalty.

People who are terminally ill with only 12 months to live can also withdraw their cash without paying a fee.

The account has to be open for at least a year before you’ll see the bonus added.

Then, the bonus is paid monthly – if you’ve put money in that month – and takes between four and nine weeks to arrive.

Bear in mind that contributions into a LISA will count towards your overall yearly £20,000 ISA allowance too.

How to find the best LISA?

Don’t forget to shop around for the best LISA rate.

You aren’t tied to one provider, so if you’ve got an account you can still shop around for the best rates.

There’s also just days left to claim up to £125 for working from home.

There are other things you need to do to be prepared for the end of the tax year, including checking your benefits.

Thousands of households are paying more tax from this month – this is how you can reduce the impact of the hikes.

This post first appeared on thesun.co.uk