Coronavirus: Government cuts Lifetime Isa withdrawal fees

Coronavirus: Government cuts Lifetime Isa withdrawal fees

Lifetime Isa holders will no longer have to pay an additional penalty if they want to take their cash out early

Stephen Little
Fri, 05/01/2020 – 14:49

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Lifetime Isa (Lisa) savers affected by the coronavirus pandemic will no longer have to pay an additional withdrawal charge if they want to access their funds early.

The Government says it is temporarily relaxing charges for anyone with a Lisa who wants to access their cash during the current financial year.

Until now, savers paid a penalty of 25% on withdrawals for any reason other than putting down a deposit on their first house up until their 60th birthday.

The Government has now cut the penalty to 20% until April 2021.

What does this mean for me?

This means account holders will only have to pay back the Government bonus they have received and not the additional withdrawal charge of 5%. 

Savers will get back all they money that they put in, unless their Lisa was invested in stocks and shares.

The Lisa was introduced in April 2017 and can be opened by anyone aged 18-40. Lisa savers can put away up to £4,000 a year until they are 50 and they are seen as the long-term replacement for Help to Buy Isas.

It can be used by first-time buyers to fund a deposit for a property or taken tax-free at the age of 60, with a tempting 25% bonus on offer.

John Glen, the economic secretary to the Treasury, says: “We know that some people are experiencing financial difficulties during these unprecedented times and we want to make it as easy as possible for people to access their savings, especially if it helps them avoid falling into high cost or unmanageable debt.

“That’s why we are reducing the withdrawal charge for Lifetime Isas, so people can access their funds to help get them back on their feet.”

The rule change will be backdated to 6 March, so anyone who has withdrawn their money early since that date and paid a 25% charge will have the difference refunded.

Carol Knight, chief operating officer at The Investing and Savings Alliance (TISA), says the decision to relax the withdrawal charge is a “fantastic step” and will make a significant difference to people affected by coronavirus.

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Premium Bonds May 2020: have you won a prize?

Premium Bonds May 2020: have you won a prize?

Find out if you are one of the lucky Premium Bond savers in May’s prize draw

Brean Horne
Fri, 05/01/2020 – 14:10

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Two lucky customers of National Savings & Investments (NS&) Premium Bonds have won the jackpot of £1 million in this month’s prize draw. 

The first millionaire is a Londoner, with the winning bond number of 344ZE146007 and he has the maximum Premium Bond holding of £50,000. 

He bought the lucky bond in November 2018 and is the fifth Premium Bond millionaire from inner London. 

This month’s second millionaire is a woman based in Gloucestershire. Her winning bond number, 366AP817645, was purchased in August 2019. 

She is the seventh jackpot winner from the county and has £34,000 invested in the deals.

For the May prize draw a total of 3,578,134 prizes will be paid out.  

Value of prize Number of prizes
£1,000,000 2
£100,000 6
£50,000 13
£25,000 25
£10,000 62
£5,000 124
£1,000 2,044
£500 6,132
£100 28,068
£50 28,068
£25 3,513,590

How to claim a Premium Bonds prize

You can check to see if you have won a Premium Bonds prize from 2 May 2020 on the NS&I website or via its Prize Checker app.

More recently NS&I has introduced text and email notifications which you can sign up to as well. 

You can also arrange for any Premium Bonds prizes to be paid directly into your bank account. 

All you need to do is log into your NS&I account online, go to ‘your profile’ and select ‘your prize options.’

How to track down lost Premium Bonds

Currently, there are more than 1.7 million Premiums Bonds prizes worth more than £65 million that are still waiting to be claimed. 

If you think you have an unclaimed Premium Bond prize, you can use NS&I’s tracing service or the My Lost Account website to help you track them down.

You will need to provide details such as your full name, address, an estimate of how many Premium Bonds you hold and how long you have had them.

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App launches to teach children about money during lockdown

App launches to teach children about money during lockdown

Children can get online help to improve their understanding of personal finance with videos, games, role play and quizzes

Stephen Little
Fri, 05/01/2020 – 12:34

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An app has been launched to help primary school children stuck at home because of the coronavirus pandemic learn about financial education.

The charity MyBnk has created a free home-based learning programme for the families of five to seven-year-olds to help them learn about personal finance.

Family Money Twist gets the whole family learning how to save and spend responsibly through adapted curriculla.

It offers children a range of videos, games, role play and quizzes to help increase their understanding of personal finance.

Maths, drawing, literacy skills and drama are used to build positive habits and improve children’s understanding of the value of money and delayed gratification. 

The initiative is funded by KickStart Money, a coalition of the UK’s biggest financial institutions.

Guy Rigden, chief executive of MyBnk, says: “We believe that to properly manage your money, you need to start learning about it from an early age to make positive choices in the future. Families are the most important messengers in children’s lives but personal finance is often a taboo subject.

“We hope these tools can help develop the healthy attitudes and behaviours that lay the foundation for greater financial resilience in these testing times.”

Why is it needed?

Money consciousness and attitudes are set at the age of seven, according to research from the Money Advice Service.

Currently there are no compulsory money lessons for primary school children in the UK.

The coronavirus pandemic has had a huge impact on millions of households, many of whom were already in a fragile financial situation.

With the impact of the pandemic likely to last years, having an in-depth knowledge of personal finance issues will become more important than ever.

John Glen, the city minister, says: “These programmes will help young people to make smart financial decisions when they’re older.”

Family Money Twist

MyBnk has launched one of its programmes, and will launch the other on 11 May.

The first is aimed at school years one and two (five to seven year-olds), and the second will target school years three to six (seven to 11 year-olds).

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