Launch of Lifetime ISAs today, free £55 with Barclays, McDonald’s hack and 40% of La Redoute. These are our Money Saving Expert Martin Lewis’ Deals of the Week.
Remember, deals can change quickly, even while I’m on the programme. So always double-check the terms and conditions before spending. Plus, while I hope these deals will save you cash, don’t spend if you can’t afford it, don’t need it, or won’t use it.
LISAs launch today - get up to £32,000 free
The launch today of the new LISA (Lifetime ISA) looks like it's going to be a damp squib, with only a few providers offering them. Yet don't ignore it. After all, £1,000 of annual free cash is nowt to be sneezed at - and for first-time buyers, delay could cost.
The LISA is a tax-free wrapper that lets you put up to £4,000 in it every year as cash savings paying interest, or stocks & shares giving investment growth (or loss). For detailed information, pros and cons read Martin’s full “Top Lifetime ISAs guide & best buys”, but for speed here's the 6 key must-knows...
1. You have to be at least 18 but under 40 to open one. So those pushing 40 need to be speedy, eg, if you turn 40 on Friday, open it today. If you're too old to open one, Help to Buy ISAs - while you can put less in - also have a 25% bonus and don't have an upper age limit. For (grand)parents wanting to help their (grand)kids buy a home, giving them cash to put in a LISA is a great way to do it.
2. You get a 25% bonus on everything you put in. For every pound you contribute, the state adds 25% each year, until you're 50. So if you save the maximum £4,000 a year, you get £1,000 added. Someone starting at 18 maxing it annually could get £32,000 added (if the system doesn't change).
3. It's a NO-BRAINER for almost every 1st-time buyer. Once you've held a LISA for 12 months, the money and bonus can be used by first-time buyers towards the home and mortgage deposits for any residential property costing up to £450,000. Two first-timers buying together can get a LISA each, effectively doubling the bonus. A first-timer buying with a non-first-timer can still get one and the bonus.
4. It can be used for later life saving too - but be careful. You also get the bonus if LISA money is taken out once you're 60+. You can even use a LISA first to buy a home, then keep it open and pay in to it for retirement. Yet unless you're self-employed and a basic-rate taxpayer, saving in a pension rather than a LISA's likely to be more lucrative.
5. After the 1st year, other withdrawals have a penalty. You can withdraw money from a LISA whenever you want, penalty-free, until 5 April 2018 (though you'll need to close it). After, unless it's for a qualifying first-time property, you've hit 60 (or have a terminal illness/die) there's a 25% penalty taken off withdrawals. The net effect is you lose roughly £6 per £100 you put in (do it on a calculator if you don't believe me). So only put money in you're sure will be used for one of the two intended purposes.
6. Wannabe 1st-time buyer? Even if you've no savings, open a LISA with the minimum ASAP to start the clock. You must have a LISA open for a year to be able to get the first-time-buyer bonus and use it for a property. So even if you open one this week, you'll be waiting until April 2018 before you can buy and get the bonus. So open a LISA now with the bare minimum (can be £1) just to get the clock ticking, in case you want to add to it later.Those with a Help to Buy ISA should definitely do this (you can have both; you just can't get the bonus on both). If you find you won't use your Help to Buy ISA this year, you can transfer it into a LISA with no issue before 5 April 2018.
So far only four providers, all stocks & shares firms, say they'll offer LISAs from today. Not too helpful, as most first-time buyers want to save in cash as they're only putting money away for a short time - though Skipton Building Society has said it'll launch a cash LISA in June. My guide (linked above) will be updated regularly as any new products launch.
Bank with Barclays? Get a free £55 in a year: If you bank with Barclays sign up to its Blue Rewards scheme, and you can gain an extra £55 in your first year. It’s available to new and existing current account customers who bank online or via its app, and it’ll give you at least a £7 reward each month (and double that in the first month if you sign up by 30 April) – or more if you’ve a mortgage, home insurance or personal loan with it. There’s a £3/mth fee for the account, so after that you’re £4/mth better off or £48/year (£55 if you sign up now).
You need to meet its criteria though, which is to pay in at least £800 (equivalent to around £9,800 pre-tax salary) and have minimum two direct debits set up. If you’re going to stay with Barclays definitely do it, but don’t switch to it or even stick with it for this, as there are many accounts that give far more.
McDonald’s hack: Buy anything from McDonald’s (cheapest item is an ice cream cone at 69p) and at the top of your receipt there is a code you can input in the Food for Thoughts website, where you give feedback in a survey. That gives you a number you can put on your receipt which works as a voucher for a £1.99 Big Mac and fries (normally £4ish). And as you then get a receipt with the Big Mac & fries you can do it again (and again) until the survey ends. Do be eat aware though.
40% off La Redoute: Go online to big French online department store La Redoute and enter the code BIG40 and you’ll be able to get 40% off everything (even sale items which are already up to 50% off), including many big brand clothes, shoes, furniture and more until 11.59pm on Thursday (13 April). Examples include women’s Levi’s jeans for £51 from £85, Converse 'All-Star' white trainers for £35 from £59 and men’s Nike trainers for £54 from £90. Though of course it’s stock dependent. Delivery is £3.99 or you can pick up from a collection point for free.