Young Adults Lose £500+ Annually by Ignoring This Savings Hack
A significant number of young adults, aged 18 to 28, are missing out on a substantial government bonus due to not opening a Lifetime ISA (LISA). Meanwhile, they face financial challenges such as high house deposit needs and costly living expenses.
Research reveals that only 35% of young adults have opened a LISA, leaving 65% unable to claim the 25% government bonus on savings up to £4,000 per year. This means they miss out on an average of £512.77 annually. Despite this, 90% of young people are actively trying to save money, with an average of £208 per month and £6,510 in savings.
The primary barriers to saving more money are the high cost of food (33%) and low income (29%), followed by utility bills (26%) and online shopping (18%). Young adults estimate they need over £42,000 for a house deposit, highlighting the financial pressure they face.
Rajan Lakhani, head of finance at Plum, which offers the Lifetime ISA, notes that adult Gen Zs could have claimed over £3.1bn in the last 12 months through LISAs. However, 57% of young adults feel overwhelmed by the number of savings options available, and 30% are unaware of LISAs and the potential annual bonus of up to £1,000. Opening a LISA at 18 and contributing £4,000 annually could result in £32,000 of free money by age 50.
The government's LISA initiative offers a substantial bonus to young adults, but many are unaware or overwhelmed by the options, leading to missed opportunities. Addressing this could help young people better manage their finances and secure their future.
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