The huge new ISA and Lifetime ISA changes explained | Flight crew secrets

In this week’s episode, there’s a deep dive into first-time buyer savings, with a special focus on Lifetime ISAs (LISAs) and the now-closed but still widely held Help to Buy ISAs. Martin Lewis runs through the pros, pitfalls, and key differences between the schemes, including bonuses and withdrawal rules. Whether you’re saving for your first home or advising someone who is, this segment is packed with practical tips to maximise government support and avoid costly mistakes. Martin unpacks a major shake-up to Shares ISA rules, with what it means for savers, investors, and anyone trying to grow their money tax-efficiently. He breaks down the proposed changes and whether you should be thinking differently about where you put your savings going forward. In the Tell Us, Martin turns to listeners working in the travel industry - airlines, hotels, and beyond. Asking: what are the biggest mistakes holidaymakers make? From booking blunders and baggage errors to check-in timing and hidden costs, industry insiders share their top tips on how to travel smarter and smoother this summer. Finally, in the Mastermind section, Adrian tackles a tricky consumer issue: who do you complain to if you used a claims firm for car finance and feel you were misled? If you want to ask Martin a question, you now can! His Question Time podcast lets you ask Martin absolutely anything and everything (within reason!). So, if you’ve always wanted to know which letter of the alphabet is his favourite, how many marshmallows he can fit in his mouth at any one time, or have a very complicated question about your finances, email it to [email protected] mailto:[email protected].

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

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• 0:40Martin Lewis?

  Here's your quick five lifetime ISA needs to know. Do not pay an exit or other fees if you want an independent cheque first. I think they should have done it by carrot, they're doing it by stick. I think it's going to cause a lot of people to be pretty upset about it. Just get a quid in, get it open. Hello, I'm Martin Lewis and this is the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. Well, we don't wonder, we all know really, don't we? Anyway, this is our big topic episode where each week we lead on one main subject to help you save. Usually most of it comes from a BBC Radio 5 live show with Adrian Charles, but there's also bonus money-saving tips and tricks just for you, lucky, lucky podcast listeners. Play the theme tune.

• 1:40Speaker 01

  Martin Lewis, how are you, sir?

• 1:43Martin Lewis?

  I'm doing very well, thank you very much, but we have a busy programme for everyone today. There have been a raft of huge announcements to shake up the ISA Individual Savings Account regime this week and we're going to try and get through all of them. First of all, we all knew the cash ISA limit is being cut next year for those under 65, but now lots of specific rules have come in about what cash you can keep in a shares ISA, when you can transfer, when you can't transfer. And quite a few people are up in arms about it. I'll be going through step by step, exactly what it means for people. The bigger news this week though, is it's been announced there is to be a new first time buyer ISA to replace the lifetime ISA. My guess is

• 2:25Martin Lewis?

  it'll be coming in next April. We've got the consultation document. I'll be talking you through the details of the new first time buyer ISA, which quite interestingly is called the first time buyer ISA. And what does this mean for those who already have money in lifetime ISAs and help to buy ISAs? Should you still continue to use them? What you should do and a lot more. We're drowning in questions. I hope you'll be drowning in answers at the end. Well, tell us this week, do you work for an airline, hotel or overseas travel business? If you do, what are the biggest mistakes people make when flying or going abroad? We've had so many, I've had to split it into two and I'll be doing some this week and some next week. And then of course, to finish, Adrian, don't worry, we can squeeze it in. We have a mastermind for you. The subject this week, car finance reclaiming. We've

• 3:10Martin Lewis?

  done a number of programmes on it. You should be, you should find it easy peasy lemon squeezy.

• 3:14Speaker 05

  It never is. You make it so.

• 3:24Speaker 05

  Now we've got plenty to get through, Martin, just a quick health check. In these temperatures, have you reduced your daily step requirement? Have you reduced your press up target?

• 3:36Martin Lewis?

  So daily step requirement not reduced. I've just walked in. I'm very glad I'm in an empty studio and you're somewhere else because there are substantial sweat patches going on. Very interesting. Normally when I walk, my heart rate doesn't go above 100 because I do a lot of walking. Today, it was, I was checking, it was around 125. So I was actually getting some cardio from it. So it's about a 50 minute walk in. Press ups, Adrian, is off. I did my shoulder in and I've had to call off the 25,000 press ups in a year challenge. I'm not allowed to do press ups at the moment and haven't been for six weeks. It's very sad.

• 4:12Martin Lewis?

  Okay, so today's pod is all about ISAs, individual savings accounts. So I thought before we get into the main meat of all the changes, I would give you a quick beginner's guide. Don't worry though, understanding how ISAs work is a piece of cake. And I say that because I've literally been using the same cake analogy since 2001. If you've heard it before, just gut over it. Gutt, no, okay. Right, so picture a cake. Think of a chocolate cake, if you like, for cash savings, or a strawberry cake for shares savings. Now, normally, it's sitting there. Your cash savings gains interest and the tax collector can come over and take a bite out of that. Your shares might have capital gains, profits,

• 4:55Martin Lewis?

  or they might get dividends being paid each year, income on your shares or funds, or even interest from corporate bonds. And again, the tax collector can come along and take a bite out of the strawberry cake too. But I want you to think of an ISA like a wrapper, a protective piece of cling film. You can wrap around some of the cake. A £20,000 limit each tax year. Once your cake is inside it, nothing changes. The cash is still cash, the chocolate cake's still chocolate. The shares are still shares, the strawberry cake is still strawberry. The only difference is now, the tax collector, well, there's cling film. They can't take a bite anymore, so you get to keep it all. That's the point of ISAs.

• 5:38Martin Lewis?

  And once you put your money in ISA, you don't just get the gain for that tax year. As long as it stays in the cling film, you get it year after year after year. That's why some people have hundreds of thousands of pounds in cash ISAs. And there are over 5,000 people who've been maxing out their shares ISA allowance each year and have over a million pounds all protected from the tax collector inside their ISA. Hopefully, you understand what an ISA is now. Let's move to the meat. After the cake? Probably a bad analogy. Well, I suppose you'd normally have the meat first, then just get on with it.

• 6:16Martin Lewis?

  Okay, so now I hope you understand what an ISA is. But there's a lot in this pod, so I want to tell you where we're going to be going to help you understand the big picture. I'm going to start on cash and shares ISAs. These are the general ISAs any adult can have in the UK. There's no bonus or boon with them for first time buyers. This is just where you can save or invest tax free. The big change that's coming, that we've already known about, is that from April next year, under 65s will have the limit of what they can put in a new cash ISA, reduced from £20,000 per tax year to £12,000 per tax year. The investment limit will stay at 20 grand. But what's been announced this week is a whole load of ancillary

• 7:01Martin Lewis?

  anti-avoidance rules, if you like, because there are ways you could utilise a shares ISA to be effectively a cash ISA, so you could keep a £20,000 cash ISA in it. And what the government's done this week is try and shut those routes down. The problem for me is it has a few knock-on unintended consequences that I will be explaining. After that, we're going to switch subject slightly to the proposals that from probably next year, next April, there will be a new first time buyer ISA to replace the existing first time buyer ISA, which is the lifetime ISA. That first time buyer ISA will, just like the lifetime ISA, give you a bonus on what you've saved towards your deposit.

• 7:43Martin Lewis?

  So I'm going to talk you through what's been proposed, what we know, we know quite a lot, what we don't know, we don't know quite a lot. And then after that, I'm going to move in detail on the existing first time buyer product, the lifetime ISA, that you can currently save up to £4,000 a year in and get a £1,000 bonus towards your deposit from the state. So I'll talk you through exactly how that works, how you should use it now, knowing that the first time buyer ISA is coming in, and the pros and cons of it. There's a lot to talk about, let's do it.

• 8:20Martin Lewis?

  I think we should probably start with the changes to cash ISAs. Okay, go on then. Which are the rules that are coming in. So what we already knew was that in April 2027, the cash ISA limit for those aged under 65 will drop from the current £20,000 to £12,000. The overall ISA limit will remain at £20,000. So it means you could put £12,000 in a cash ISA and the remaining £8,000 in a shares ISA. You could put it all in a shares ISA. You could put £5,000 in the cash ISA. As long as you haven't got more than £12,000 going into cash in that tax year. Money already in doesn't count. That doesn't matter. So if you've already got money in cash ISAs, the limit doesn't apply. So only for new money going in a tax year.

• 9:05Martin Lewis?

  And that will start from April 2027. But there have been a lot of small changes coming in. And we have to understand that by first thinking, why are they doing this? Well, I've spoken to Rachel Reeves about this a few times and she has said the reason is they want young people to invest. They want to encourage more investment rather than saving, saying it's good for the economy. It is. It's good for the individual. Investing over the long term in a broad range of shares is good for the individual. And so I agree with the reason. Personally, I disagree with the method. I think they should have done it by carrot. They're doing it by stick. I think it's going to cause a lot of people to be pretty upset about it. I mean, to be honest, I was the one behind the carve out

• 9:50Martin Lewis?

  for the over 65s because I went in with the Chancellor twice. Or as one of those people, I should say. But I think I remember the discussion. It was pretty plain. Because she said, we want younger people to invest. And I said, why on earth are you going to prevent over 65s who are trying to de-risk from putting more money in a cash ISA? And she said, okay, fair. And the 65s came from that. So and some people don't like me for it. They say it's a generational divide. Well, I don't like the whole policy, but we managed to get a carve out for some people. So let's go through what we've learnt this week because this is important. First of all. When you have money in a shares ISA, you can currently keep it in a cash part of the shares ISA, sort of like a savings equivalent, and earn interest. That's set up so that you can hold your money you want to invest in there,

• 10:34Martin Lewis?

  but some people use it to keep money in for a longer period. They have now said that cash held in shares ISAs, and also innovative finance ISAs, will not be interest-free, and this is age irrelevant, so this will happen for the over 65s too, from next April. There will be a 22% tax on cash savings. Also, just to be really technical, Sharia savings that don't pay interest, they pay an equivalent profit, will count in the same way. So there'll be a 22% tax on those too. Now, I just want to be really clear here, as I know this confuses some people. When we're talking about your savings being taxed in the UK, we're never talking about the savings themselves. We're talking about what the savings earn.

• 11:16Martin Lewis?

  In other words, the interest you earn on savings is what is taxable. So when we say there will be a 22% tax on cash held inside a shares ISA, what that means is if the cash held inside a shares ISA earns interest, 22% of the interest will be taxed. That's how it will work. Now, of course, it's worth remembering, you would have the same if you didn't have your money inside an ISA. A basic rate taxpayer would pay 20% tax on their interest, a higher rate taxpayer 40%, a top rate taxpayer 45%. Though, of course, there is a thing called the personal savings allowance, which means a basic rate taxpayer outside an ISA can earn a thousand pounds of interest a year, tax-free.

• 11:58Martin Lewis?

  A higher rate 40% taxpayer, 500 pounds of interest a year, tax-free. So if you haven't used that up, and you are from next April going to be keeping cash inside a shares ISA, well, there is an argument, you'd be better off taking it out. But then, of course, once you take it out, you've already used up your ISA allowance when you put it in, and it's all just a bit confusing. Maybe they should have made it simpler. Anyway, back to the pod. Now, my problem with this is actually, one of the ways that beginners investors invest is they have cash in their account and they drip feed it in over a set period so they can try and ride out the ups and downs of the market and this will disincentivise that, which I'm slightly worried about. They're trying to do it to get people to invest and I think this may well actually have some disincentive effect too.

• 12:43Martin Lewis?

  Other new rules, under 65s won't be able to transfer money from shares ISAs to cash ISAs, so again, you can't put your money in a shares ISA and then decide, oh, I'm now going to move it into a cash ISA, which you can do right now. So from next April that goes, though you will of course be able to move money from a cash ISA to a shares ISA. Money market funds, which are investment funds that are pretty cash-like, we thought they might have a tax charge on them too. They've decided not to do that, but they've said you can't have all of your money market funds, your whole shares ISA be money market funds. But they haven't put a minimum, so you could literally, you know, put a quid in a shares fund and all the rest in a money market fund if you wanted to. I'm not sure

• 13:27Martin Lewis?

  why you would, but you could if you wanted to do that. Short date gilts won't count as cash-like assets, which many were worried about. If you know what they are, you know what they are. If you don't, you're probably not interested in them at the moment. I'll talk about more about that another date. And the final one on this, or getting touch, if you've got questions on it. We now know what age 65 means, and I have been asked this so many times, I can now tell you. It is not that you will suddenly be allowed to put £20,000 into a cash ISA on your birthday. They're saying, in the tax year you turn 65, you will be allowed to put £20,000 in and every year beyond that. So if you turn 65 on the 5th of April, the day before the new tax year, you could actually put £20,000 in the day after your 64th birthday.

• 14:15Speaker 05

  Right, got it. Shall we do some questions on all this? The Gavin, does this affect cash ISAs or is it just cash held in stocks and shares ISAs?

• 14:26Martin Lewis?

  So the new tax is only on cash held in stocks and shares ISAs. A cash ISA is by definition a savings account where the interest is never taxable. You will never pay tax on it and it doesn't count towards all your other tax allowances. So it doesn't count to the thousand pound personal savings allowance that the basic rate tax payer can put money in tax free. And that will continue. A shares ISA will continue to be tax free for capital gains, tax free from income from bonds, tax free on dividends, but you will now be taxed on cash or certain very similar to cash type things held in a shares ISA from April 2027, it'll be 22%.

• 15:09Speaker 05

  Tony, I don't fully understand the cash held in a shares ISA concept. What else would you, what else would you hold in there?

• 15:18Martin Lewis?

  Well, a shares ISA is for holding shares primarily and funds and bonds and all those type of investments. That's the idea of a shares ISA. Hopefully, I probably explained it to you earlier. But people keep cash in there because, so let's put it like this, you want to feed money into a global index tracker. You put your £20,000 in at the start of the year into your shares ISA. This is how it currently works. The ISA provider might be paying you three or 4% interest. You probably won't get as much as putting it in a cash ISA, but you can get decent interest. And you say, I want to put a 12th of it into the market and buy that global index tracker each month. That way, sometimes you'll be buying on a high, sometimes you'll be buying on a low, but you're trying to spread it out,

• 16:00Martin Lewis?

  pound cost average it so that you're putting your money in a year and you're not buying all too high a price. That's the idea. And so people then, they keep their money in cash in a shares ISA to do that. Equally, if you've just sold a fund in a shares ISA, it goes into cash. And you will want interest, well, that's being done and you might hold it in there until you decide what to invest in next. Now that cash, the savings bit.

• 16:25Martin Lewis?

  Money you're holding in savings in a shares ISA is going to be taxable. And hopefully, as I've just explained the use of it, you can see why many people have a problem with it. I mean, it is done to discourage people manipulating the situation and using their £20,000 shares ISA limit as a cash ISA limit. But it is also going to have some, I think, some perverse market effects for those people who are trying to use their shares ISA sensibly to buy and sell their funds at the right time.

• 16:52Speaker 05

  Lesley, so if you have a cash ISA 20K now at 62, is that still okay for next year?

• 16:58Martin Lewis?

  These new rules, well, the new rules on how much you can put in only apply to new money being put in. Once you put money in a cash ISA or a shares ISA, it stays tax-free year after year. So if you think about it, you could have put £20,000 in four years ago, £20,000 in three years ago, £20,000 in two years ago, £20,000 in one year ago, £20,000 in this year. You would have, I mean, £100,000 plus interest or growth if it was shares. All of that stays as it is right now. The limit is only being reduced on new money you put in each tax year from next April.

• 17:35Speaker 05

  And Paul says, can you transfer money from a stock and shares ISA or a innovative finance ISA into a cash ISA?

• 17:43Martin Lewis?

  No.

• 17:44Speaker 05

  No, you can't.

• 17:45Martin Lewis?

  No, that's gone. But you will still be able to move money from cash to shares. Now, look, the logic of the rules is pretty clear, and I should probably say what the current Chancellor wants to happen. And of course, with a change at the top of the Labour Party, there's always a chance that these proposals that come in in April 2027 can change. I think that's relatively unlikely on this particular one because they've been through a sort of rules consultation. But what she is trying to do is to try and encourage investing and putting barriers in the way to stop people shifting to cash from shares. I mean, that's the aim that it's being done for. Whether we like it or not, there is a logic in the rules to an extent, even though I do think they have some perverse effects.

• 18:26Speaker 05

  Paul says, how's this going to be checked? Is this not more administrative red tape?

• 18:30Martin Lewis?

  Well, yeah, I mean, I presume that the way that the 22% tax will be applied will be from the shares ISA provider. That's the only way I can see it being done, and it will have to be applied within there. And yes, of course, it'll be more red tape.

• 18:45Martin Lewis?

  Now, we're going to move on to tax-free ISAs specifically for first-time buyers, or wannabe first-time buyers, or someone who may be a first-time buyer in 10 or 15 years' time. There have been two of these products. The lifetime ISA, or LISA, is the one you can currently open. Its predecessor is the Help to Buy ISA. Both work in very roughly the same way. You save money in them, and then the state adds a 25% bonus on what you've saved when you use it towards your first property. So with the lifetime ISA, for example, you can put up to £4,000 per tax year in, and the state adds 25% on top.

• 19:25Martin Lewis?

  So if you max it out with £4,000 in, that's £1,000 free per tax year. It is a huge benefit, though there are lots of ifs and buts, such as with a lifetime ISA, you can only use it towards a property worth up to £450,000. That doesn't sound like a problem for most of the country, but it can be a real pain for those people in London and the South East, where typical first-time buyer properties can often be over £450,000. Anyway, what we're going to be talking about today is going to cause me some naming problems. I've always collectively called the LISA and the Help to Buy ISA first-time buyer ISAs, but now the government is proposing a new product called the First Time Buyer ISA. Over to my chat with Adrian.

• 20:09Speaker 05

  Let's move on to the first-time buyer story. So this is a consultation to replace the lifetime ISA with a new ISA called the First Time Buyer's LISA. LISA. First Time Buyer's ISA. Okay. Tell us about this, then.

• 20:27Martin Lewis?

  Okay, so the consultation ends in August. My guess, and it is only a guess, is that they're trying to bring this in from April 2027. It is a return in many ways to a product much closer to the lifetime ISA's predecessor, the Help to Buy ISA. It's only for first-time buyers, as the name suggests. It's not going to be for retirement saving. Remember that the lifetime ISA is this slightly weird hybrid product. For first time buyers and also for savings over the age of 60, you'll be, you can take the money out that George Osborne invented to try and take some cost out of his treasury and to defer it and add the cost of future chancellors. So here's how it's going to work. The first time buyer ISA is a minimum age 18. So far, there's no maximum age.

• 21:13Martin Lewis?

  Remember, the lifetime ISA is for 18 to 39s. This does not have a maximum age, but of course you have to be a first time buyer to get the bonus on it. The bonus will be on the amount saved and it will be paid at exchange. Currently with the lifetime ISA, the bonus is paid each month, but here you will only get it at exchange. We do not yet know the bonus rate. We do not yet know how much you'll be able to put in it. And we know it will have a limit on the value of the property you can purchase, but we do not yet know, and it is not in the consultation, and if this is part of the consultation, what that limit will be.

• 21:52Martin Lewis?

  However, they say in the consultation, they aim, and remember consultation is a proposal, so they can change after people feed in. They aim to align the LISA and Help to Buy ISA property limit with the new first time buyer property limit. Now, the Help to Buy ISA property limit is £250,000 or £450,000 in London. The lifetime ISA property limit is £450,000 across the UK. So my view is if they're hoping to align all of them, the minimum the new threshold

• 22:30Martin Lewis?

  must be is £450,000 because it would be unthinkable and political suicide to screw young people over by lowering the lifetime ISA cap when they've already put money in. So logic dictates it must be at least £450,000 and if it isn't, people should rightly be absolutely up in arms about that. What we don't know is whether they will be uprating the £450,000 or whatever the new property threshold is with inflation or house prices each year. I will certainly be campaigning for that. To be done so because that's caused a mass unfairness on the lifetime ISA. Few more points, you will, just like the other two, have to be getting a residential mortgage to do it.

• 23:12Martin Lewis?

  It will be an individual product, so it depends on whether you're a first time buyer, not on who you're buying with. The bonus is paid at exchange, not completion, which is good. The Help to Buy ISA was a big problem, it was paid too late in the process. This is paid at exchange, so you can use it not just as your mortgage deposit, but you can use it to help give a deposit to whomever you're buying the house off. That also means there isn't a withdrawal penalty, because unlike the lifetime ISA where the bonus is paid each month, here, if you withdraw early and you're not buying a house, there's no need for a penalty because you haven't had the bonus yet. You must like the lifetime ISA, you must have it open for a year to use it. So, you know, you're going to want to get a pound in as soon as possible, so you've got it open and get that clock ticking, just like I suggest with the lifetime ISA.

• 23:55Martin Lewis?

  It will be cash or shares, first time buyers ISAs. The most first time buyers, you're only saving for the short term, you should probably want to get it in cash. Transfers will be allowed between different providers. And this is the crucial one, which I think is going to cause a lot of people maybe frustrations, but maybe some positives when I explain it a bit more. If you have an existing Help to Buy ISA, which is a now closed product, but many people still do have money in from when it was an open product, you will be allowed to transfer that into a first time buyer ISA. If you have an existing lifetime ISA or LISA, you will not be able to transfer it in to the first time buyer ISA.

• 24:36Martin Lewis?

  However, you will be able to use a LISA and a first time buyer ISA together to buy a property and get the bonus on both, which is quite important. Again, a reminder, all of this is consultation and proposals and things could change.

• 24:56Speaker 05

  Okay, some questions.

• 24:57Martin Lewis?

  Yeah, I'm sure.

• 24:58Speaker 05

  Lisa says, I know I get things wrong sometimes, but replacing me is a bit harsh.

• 25:02Martin Lewis?

  Oh, I'm sorry Lisa, I'm sorry LISA. But look, the most important thing for Lisa and for Lysus, what they are saying quite clearly is if you have a LISA and a Help to Buy ISA. They will continue on current terms. So when the new one comes in, you may not be able to open a new ISA, but you will be able to continue to use it as you currently can. Though worth noting, the Help to Buy ISA has a deadline. It has to be used by 2029. The Lifetime ISA doesn't. So existing, so ISAs can't continue. Just, I was going to say, people can't put things in you, Lisa, but I think that's probably a bad phrase. I think we'll move on from that.

• 25:38Speaker 05

  Okay. Carol, given the balance is paid at exchange.

• 25:41Martin Lewis?

  I realise what I said. You know, when you realise the words coming out of your mouth.

• 25:43Speaker 05

  It's all right for you. You can take it out of the podcast, can't you? But we, it's gone now, Martin.

• 25:47Martin Lewis?

  We'll keep in, we'll keep in.

• 25:49Speaker 05

  Given the balance is paid at exchange, says Carol, would it be a percentage of the balance at exchange or a percentage of all deposits? Depending how long the account is open, those two amounts could be very different with compound interest.

• 26:01Martin Lewis?

  It is a very interesting point. And under the consultation, it will be based on the amount you have contributed without interest. I will be certainly suggesting they also add the bonus to interest because this is a big difference between the ISA and the first time buyer ISA. At the moment, with the Lifetime ISA, you get the bonus on what you've contributed each month. Then you have the bonus sitting in your ISA account and then you have interest on top of both what you contributed and the bonus. So effectively, you have a compounding benefit on the bonus. Now, if they're going to add the bonus at exchange and they're only going to do it on the money on the way in, you're not getting that compounding benefit. And I think there's an argument to say you should.

• 26:46Martin Lewis?

  I think it's an argument I will lose, though.

• 26:49Speaker 05

  Okay, Stacey, can someone 40 plus access any of these savings accounts as a first time buyer?

• 26:56Martin Lewis?

  So the proposals are you will be able to open a first time buyer ISA when it starts next April because there is no upper age limit as there is with the Lifetime ISA. There wasn't an age limit on the Help to Buy ISA, but it's gone and you can't open it. It is worth noting, it's the age you open it that counts. So anybody aged 39 certainly should be getting a pound in it now so you have it open and then you can continue to use it, even if you don't want it, even if you think it's pointless because you're not a first time buyer. There might be a chance you want to use it later for retirement savings. But the answer to the question is, the proposal is the first time buyer ISA will be available for over 40s.

• 27:35Speaker 05

  Right. Alexandra, what about a singleton who lives with boyfriend, but boyfriend has a house? The Singleton, however, is not on, doesn't have a mortgage, is what, is not on the mortgage, I should say. Can it be used to purchase a house in the future with the boyfriend as she will be a first time buyer?

• 27:53Martin Lewis?

  Yes, so let's be very plain, for both the Help to Buy ISA, the lifetime, it's not a both, for all three, I've got to change my language, it's new coming in, for all three of the Help to Buy ISA, the lifetime ISA and the First Time Buyer ISA, they are all individual products. What matters is, are you a first time buyer? If you are a first time buyer, you can use this and get the bonus. Whether you're buying with someone else who is a first time buyer, in which case they could also use this and get the bonus, or whether you're buying with someone who is not a first time buyer, in which case they can't use this but you can use this. So yes, it is not about who you buy with, it is a totally individual product and the

• 28:37Martin Lewis?

  rules apply to you, not whomever you're buying the property with.

• 28:40Speaker 05

  Alan says, so LISA cannot be transferred in as they already have the 25% bonus. What will happen when a first time buyer now buys a house? Can the LISA and the new ISA be used together, one with 25% already added together with the new ISA with 25% added at exchange, or only one?

• 28:59Martin Lewis?

  So, my current reading of the proposals is, and these are, I hope people are following, you cannot use a Help to Buy ISA and a First Time Buyer ISA together, but you could move your Help to Buy ISA money into the First Time Buyer ISA, but you can get the bonus on both a lifetime ISA and a first time buyer ISA. Now, this is actually incredibly important, and I'm going to move this to a bigger point now. That means there is a chance that you can double up, and everybody who has the ability right now, everybody, if you are aged 18 to 39 and you do not have a lifetime ISA,

• 29:41Martin Lewis?

  even if you have already bought a property, may I strongly suggest you put a pound in one. Top payers are Plum and Moneybox, both, Plum pays 5.6%, Moneybox 5.8% interest, there's a big price war on that at the moment. And I just need to explain this in detail for anyone. There are a number of reasons why. If you are a first time buyer... Because you'll be able to have a LISA and the first time buyer ISA, you may be able to double up. The reason I would do it now is with both those products, you need to have had it open a year before you can get the first time buyer bonus. So if you put a quid in now, even if you're not expecting to buy your first house now, and something were to happen next year that meant you suddenly could buy,

• 30:25Martin Lewis?

  you could dunk your four grand in the lifetime ISA, because that's the maximum you could have in each tax year, and you would instantly be eligible for a thousand pound bonus from the state, or boost from the state. And you could do, well, you couldn't do it next year because the first time buyer ISA has to be open for a year. But if you bought in two years' time, you could get the bonus on both. So putting a quid in now gives you that facility. But even if you are a, you've already bought a property, so it isn't useful for you. If you're aged between 18 to 39, the lifetime ISA allows you to save for retirement and you get the 25% bonus. Now, for most people, certainly for all employees, where you're in the auto-enrollment scheme

• 31:08Martin Lewis?

  and you get matching contributions from your company, a pension is better. And for many self-employed taxpayers, a pension's better, although it's much more, it's quite similar, putting money in a state pension, the tax benefit for a basic 25% rate taxpayer, as it is putting money in a lifetime ISA. But you do not know your future. And we have now been told the lifetime ISA will stay open. So I would absolutely make sure I have the facility of a lifetime ISA available to me, because they're going to shut it to new entrants probably next April, that's some guesswork. I would have the facility available to me by putting a pound in, so that at some point in the future, it becomes worthwhile for you to use it as a first time buyer, or it becomes worthwhile for you to use it for your retirement savings,

• 31:54Martin Lewis?

  or both, you have the facility, you have it open, and then you can use it. So just tell everybody aged 18 to 39, do you have a LISA? If not, just get a quid in, get it open, that's what really matters.

• 32:10Speaker 05

  Thank you very much, Martin. Talk again, I have to just chill out. Are those sweat patches receding at all now?

• 32:16Martin Lewis?

  Yeah, yeah, and yes, and the odor is good too, Adrian, you'll be pleased to hear.

• 32:21Speaker 05

  Okay, so those continental shapes are getting smaller by the minute, nice to know.

• 32:29Speaker 05

  Tell us about your tell us and there's some great ones this week.

• 32:32Martin Lewis?

  So the original question was, tell us, do you work for an airline, hotel or overseas travel business? If you do, what are the biggest mistakes people make when flying or going abroad? And what are your top tips? The response was absolutely fantastic, I have to tell you. So much so, Adrian, that I have segmented them. So we're going to just do flight crew today. We're only going to do the ones from the flight crew and I'm going to save the rest till next week. So why don't you start? Because my computer has just decided not to show them.

• 33:01Speaker 05

  Okay, I'll start with the first one because I really want to do the third one. It's one of my favourites to ever tell us responses. So, okay, so insurance, says Simon. Speaking as aircrew takes you abroad. Also, don't get too drunk before you board the plane. You can be refused boarding. Don't vape. Don't misbehave. The aircraft could end up in divert, have you disembark, ruin your holiday. Basically, you could get your pants sued off as well. It's only a few hours. Enjoy the flight and come and say hi to us at the front end once we land. Sounds fair to me.

• 33:35Martin Lewis?

  Absolutely right. And insurance is important because, let's just remember my golden rule, you get insurance as soon as you book. Or if you've already booked and you haven't got it, you get it as soon as you hear me say this. Because half the point of travel insurance is to cover you if something happens before you go that stops you going.

• 33:53Speaker 05

  Buy it now to start now, not to start on the day.

• 33:56Martin Lewis?

  No, buying it now to start on the day that you go on a single trip policy is fine. So if you're going away at the end of August, you'd buy it today with the date to the end of August. On an annual policy, you need to have a contiguous one in place. So if you have one now, if your annual policy ended the end of August and you were going in September, most policies would cover you if something happened now to stop you going in September, even though it was after the period. But you'd want to be buying now a policy to start the day after your existing annual policy stopped, so that you're covered all the way through. And you'd want to have that in place now too. Okay, Steve.

• 34:28Speaker 05

  Yeah.

• 34:28Martin Lewis?

  Working for Tywuy at Manchester. Scary how many people are turning up to the airport with a due to expire passport. So let's be really plain about the passport check here. So this is me, not Steve now. There are two checks. For the, on the day you enter the country, there needs to be at least six months left before the expiry date, or three months if you're going to the EU. And even so, if you're going to the EU, you need to check, will your passport be under 10 years old? So, because it used to work that you could get your passport, if you had eight months left on your passport when you were renewing, you could get that eight months added to your new one, so your new one would last 10 years and eight months.

• 35:13Martin Lewis?

  It means that you could be more than three months away from renewal of your passport, but your passport be over 10 years old, and that can stop you having entry. And I genuinely have people who get in touch with me, who this has happened to, who have been denied boarding on the plane, which is bad. Or worse, they've got on the plane and they've been denied entry when they land and sent back. Check your passport date, Steve is right. You do, Sarah.

• 35:36Speaker 05

  Sarah, said I work for an airline. Biggest mistake ever is people going to the toilet on the aircraft with no shoes on. Let's not dwell on that, but we hear you.

• 35:48Martin Lewis?

  I'm, I'm one of those people.

• 35:50Speaker 05

  Really?

• 35:50Martin Lewis?

  Yeah, I'm not sure I will be from now on. Sometimes you're taking your shoes off, you, you know, you're tired, you're sleeping, you suddenly need to, you, you go, you go, and you're not thinking.

• 35:58Speaker 05

  But on a private jet, it's different.

• 36:00Martin Lewis?

  Yeah, right. I've never been on a private jet, one day I'll do it.

• 36:02Speaker 05

  I have actually, no, I have.

• 36:04Martin Lewis?

  Oh, so you made the joke about me?

• 36:06Speaker 05

  Well, I have, no, it was when I was, a couple of times when we were covering football, um, and the, it was just cheaper to get the ITV team, I think San Sebastian. But it's very cramped, very cramped, I'd say. I was, it was a nice experience.

• 36:20Martin Lewis?

  We were all feeling pretty tired before you, I'll be honest, but you are, you know.

• 36:22Speaker 05

  Yeah, yeah, but you, you're not missing much.

• 36:24Martin Lewis?

  Please do get in touch if you feel sorry for Adrian, and think of anything, cheer him up about his cramped experience on a private jet. Um, Gemma, cabin crew here. Travelling without simple painkillers. Not all airlines can give you paracetamol or others without a doctor present. It's much easier if you have your own with you. Some passengers really think the aircraft first aid kit is a personal pharmacy. Yeah, I mean, I always take painkillers with me, just in case.

• 36:51Speaker 05

  Alex, don't pack your medication or keys in your hold luggage. Always bring spare underwear and a change of clothes in your carry-on. Do you know what I would, what I've, it's relaxed me no end, is putting, you know, one of the tracker devices, an Apple tag, putting one of those in your, in your hold luggage.

• 37:11Martin Lewis?

  Well, I mean, it will help you locate where your hold luggage is, but if you're, if it's gone from my

• 37:15Speaker 05

  If it's gone to Cancun, then, and you're in Barcelona, then obviously it's a problem.

• 37:18Martin Lewis?

  It's still not helping you, yeah. So I, I, the change of underwear is a good one. I think that's really important. And your medication, absolutely. Sam, used to work for an airline. So many people would get on a late night flight from a winter sun destination wearing little more than a bikini and then wonder why they were freezing on the plane and on landing back in the UK too. And no, we do not have any blankets we can give you.

• 37:39Speaker 05

  Right, got it. Ali, work for BA complaints. Don't complain your ice melted too fast, that's science. Well, in first class, you're paying a good amount, Ali. I think you're entitled to slow melting ice at least.

• 37:52Martin Lewis?

  We have so many good ones of these, but if you forgive me, Adrian, I'm worried we're not going to get through the lifetime ice stuff, which we need to do as well. Shall we finish there? Are you happy?

• 38:01Speaker 05

  Yes, I'm happy. I'm really enjoying going through them. I know you're doing more of them on the podcast.

• 38:09Speaker 05

  Let's move on to existing first time buyers product, the lifetime ice, which is going to be replaced, but you can still open now and use it. Again, we've had more questions asked than England did of Ghana's defence, but give us the basics first here.

• 38:21Martin Lewis?

  Yeah, lifetime isers can be opened if you're aged 18 to 39. And if you've never owned a home, you can get a 25% boost to first time buyer savings, up to a maximum £1,000 free each year. There's a rate war on two now at 5.8% as I've already said. So let's, I'll just give you a success on this. Hi, they actually say, hi, love the newsletter and the Martin Lewis podcast. Lovely double one there. This is from Jordan, who emailed a while back. Another lifetime ice a success for you. I saved for seven years and my partner six, so we got £13,000 towards our deposit from the state with interest that got us to a 20% deposit on a £330,000 property, thank you. So you can see how important it is.

• 39:05Martin Lewis?

  Here's your quick five lifetime ISA needs to know's. The 25% bonus is on everything you put in up to £4,000 a year till you're age 50. So if you started at 18 and saved till age 50, you could have £33,000. If you put £1,000 in, you'd have £1,250. You put the maximum £4,000 in, you'll have £5,000. It can be used on your first residential home costing up to £450,000. It is defined a first time buyer is those who've never owned or part owned a home anywhere worldwide and you need to be getting a mortgage. This is the big warning though. If you're not buying a qualifying home and withdraw before age 60, there is an effective 6.25% penalty.

• 39:49Martin Lewis?

  What actually happens, let's not worry about the maths too much, is you get a 25% bonus on the money you've put in and then you get a 25% taken off the money that you've got in there when you withdraw. The way the maths works on that is effectively about six and a quarter percent less than you put in, you get back. Now, I don't have a problem with the penalty in the generality where I have a real problem with the penalty is if you've been saving, you're priced out of the market and that £450,000 has not risen since 2017. So it's been frozen since they launched the product and you saved for the right reasons and now you want to buy your first property, but it's gone £460,000 because you're in London and it's expensive.

• 40:30Martin Lewis?

  You're now having to pay a penalty to the state to get your first time deposit money out because you did what the state suggested you do and use a lifetime ISA to save for your first time buyer property. I have been campaigning on that for a long time. It has not been fixed yet. We've already talked about how people buying together can have one each. That's probably where I'll stop because I know you've got loads of questions.

• 40:52Speaker 05

  There's one from Colin, if you haven't opened one yet, should you do so or wait till the new one is launched?

• 40:56Martin Lewis?

  Absolutely, as I mentioned before, I would be opening one now and getting a quid in now and then you've got a choice of which one is best for you or maybe you can use both when you get there. So have one open, having one open doesn't stop you and you can open with a quid. The two best buys, Moneybox and Plum.

• 41:11Speaker 05

  Okay. Got a question from Natasha, where are you today Natasha?

• 41:15Speaker 06

  Hello gentlemen, you alright?

• 41:17Martin Lewis?

  Hello.

• 41:17Speaker 05

  You alright?

• 41:18Speaker 06

  Hello, yeah, yeah, I'm calling from North Devon, Bitterford.

• 41:20Speaker 05

  Alright, very nice spot.

• 41:22Martin Lewis?

  It's very hot there today, isn't it? I'm being the hottest part in the country.

• 41:26Speaker 05

  Yeah, and you're working, you're working a shipyard Natasha?

• 41:29Speaker 06

  I do indeed.

• 41:31Speaker 05

  Oh, exciting.

• 41:32Martin Lewis?

  Indoors or outdoors?

• 41:33Speaker 06

  Oh, we're indoors, we're indoors.

• 41:35Speaker 05

  Is it air conditioned, is it an air conditioned indoor shipyard?

• 41:38Speaker 06

  Wishful thinking, wishful thinking.

• 41:41Martin Lewis?

  Oh no, okay.

• 41:42Speaker 05

  Alright, so what's your question?

• 41:44Speaker 06

  Um, my question is, is I'm hoping, or I'm looking to save from a deposit as a first time buyer, but I'm not sure of the best way to go about it. I used to have a Help to Buy ISA, but obviously that closed last year. So now I'm in a better financial position.

• 42:00Martin Lewis?

  Well, you say obviously, why did it close last year? You closed it, because?

• 42:03Speaker 06

  Yeah, I did, I didn't actually contribute. At the time when they were saying that they were going to close it, me and my brother opened it just in case, but obviously we didn't reach the financial position we're in now, so things have changed and now it's not there anymore.

• 42:18Martin Lewis?

  So, I think that there are two questions. Forgive me, you're not supposed to do this. How old are you?

• 42:25Speaker 06

  Forty-three.

• 42:27Martin Lewis?

  Okay. So, very simply, you cannot open the lifetime ISA, because you have to open it before you are forty. So, I would still check, they actually wrote to you and said we're closing it down because you've not put any money in the Help to Buy ISA, did they? It's definitely closed.

• 42:45Speaker 06

  That's correct, yeah.

• 42:46Martin Lewis?

  So then, your option will be this new first time buyer ISA that starts next April, my guess, they haven't said that, that's my guess, which currently in the proposals does not have a maximum age limit. We don't yet know, the lifetime ISA gives you a 25% bonus on money you put in. We don't yet know what the bonus will be and we don't yet know how much money you can put in, because that's not in the proposals. You will have to have it open a year to get the bonus. So when are you thinking about buying? When do you think you will be financially be in a position to buy?

• 43:21Speaker 06

  Maybe eighteen months maybe?

• 43:23Martin Lewis?

  Okay.

• 43:24Speaker 06

  Yeah, eighteen months, two years.

• 43:27Martin Lewis?

  Right, so let's be really plain, based on the information I have at the moment, but please remember it is a consultation and things could change. If they launch it next April, I would put my money in the first time buyer ISA, because you can, and hopefully, when you buy, you will get a bonus, let's guess it will still be at 25% of the money you put in. Now, you will only be able to get that bonus if you've had the property open, if you've had the ISA open for a year. If you buy in eighteen months' time, you won't have done, but under the current proposals, unlike the lifetime ISA, if you don't, if you're not going to get the bonus, you can just take your money out with no penalty and you will have still got interest. So you will not be any worse than just putting it in a normal ISA or a normal savings account.

• 44:12Martin Lewis?

  It will be the same. And if you wait a little bit longer and you buy a little bit later, then you would get the bonus too, so you would be better off. So at the moment, you need to be saving in just a top normal savings account or cash ISA if you pay tax on your savings, where you can build up your savings with the most interest. And then, from next April, you want to put your money, as much as you're allowed to, in the first time buyer ISA, unless these proposals change when they become real. Does that make sense?

• 44:39Speaker 06

  Fantastic, yeah, that's absolutely fantastic. Just wasn't sure to do in between the meantime, but yeah.

• 44:44Martin Lewis?

  Just go and use a savings account. If you haven't got much savings, and, you know, somewhere like Chase is paying 4.5% interest, easy access, so you could put your money in there, you could start to build it up in there, and you wait to see if this new first time buyer ISA launches. I mean, there is a tiny caveat, of course, we're about to have a new Prime Minister, and these are proposals under the current regime. I don't think this will change, but who knows?

• 45:11Speaker 06

  Okay, that's brilliant. Thank you very much, guys.

• 45:13Martin Lewis?

  Thank you. Have a lovely day.

• 45:14Speaker 06

  Have a good day, cheers. Bye.

• 45:16Martin Lewis?

  Bye bye.

• 45:16Speaker 05

  Okay, thank you. My sons each have SNS licenses, that's from Steve. Do you believe it's still worth putting in the 4K each year, given the restrictions on property purchase value and withdrawal penalty? We live in Greater London, brackets, sort of pricey.

• 45:32Martin Lewis?

  So basically, what you're saying to me is we've got money in stocks and shares, lifetime ISAs, but we're worried that the property they'll buy will be above the £450,000 cap. So this, funny, we covered this in the Question Time podcast last week, but it's got even more complicated with the announcement that's been made by the government this week. So look, if you're going to buy a property over £450,000, then, under the current rules... You would pay the penalty of 6.25%. Now, you might be using your stocks and shares lifetime ISA for retirement savings, in which case they continue to put the money in because it doesn't look like that's changing. The consultation doesn't seem to be changing that at all. But if you're going to be using it and you want to use it for first time buyer savings, then yes, there is a potential problem.

• 46:12Martin Lewis?

  Now, the only hope here is that the first time buyer ISA consultation says it will align the thresholds of the lifetime ISA and the Help to Buy ISA with the first time buyer. And it could be higher, and they could start to increase it with inflation. We just don't know yet. So whether, I'm not sure I would be putting any new money in. I wouldn't necessarily be taking any money out. I certainly wouldn't be taking any money out because we don't know what's going to be happening and you would pay a penalty to take money out. The interesting answer I gave to the person on question time who had £40,000 in and wanted to buy a house above the threshold is because you pay a 25% penalty to withdraw. He had £40,000 and that meant he'd only withdraw £30,000.

• 46:56Martin Lewis?

  And he was devastated by this and thinking, I might keep it in for retirement even though it's going to potentially stymie me buying the house that I need for my family. Because when he had originally started saving, it was for a young, he was a young, single man. My answer to him was, while you're thinking of this as 40 down to 30,000, if you had known this was going to happen, you would never have used a lifetime ISA. And you would have saved probably in a normal ISA where there's no withdrawal penalty. And you would have probably had £32,000 in because you wouldn't have had the bonus added. So the real loss is 32,000 down to 30,000. I don't like that. I don't think that's how it should work, but that is the practical way to think of it.

• 47:39Martin Lewis?

  And in that case, I said to him, if you had to pay £2,000 to access your money, which is the real opportunity cost of having put it in a lifetime ISA so that you could buy the house you want, would you? And his answer was yes, because I want to buy that house. In which case I said, then I'd get on and I'd buy the house and I would just, you know, stamp and swear a bit about the £2,000, but it's not actually a £10,000 loss. So we have to do a lot of that type of Thinking at the moment, but I would probably be holding, putting any more in a lifetime ISA until I know the result of the consultation and that should come before the end of this tax year. So you will be able to put the money in later in this tax year if it's still right for you. So I would be holding off for now, yes. Adrian, shall we move to Mastermind? And people, I've got lots more of Lilia's questions I'll be going through in the podcast.

• 48:23Martin Lewis?

  But let's play that Mastermind theme tune now.

• 48:32Martin Lewis?

  Hello, welcome to Money Mastermind. Adrian, you've currently got 19 right and 41 wrong in this three option multiple choice quiz, which means sadly you are still, and it doesn't look like changing soon, you are still

• 48:48Martin Lewis?

  no better than a random chance. So let's do the question, you ready mate?

• 48:52Speaker 05

  Yep.

• 48:53Martin Lewis?

  Adrian, you're out polishing and buffing your beloved 2007 mud brown Fiat 500. If you liked it so much last week, I brought it back. With the sort of care usually reserved for a royal undercarriage.

• 49:10Martin Lewis?

  Pretend we don't know the double entendre. Suddenly the garage door burst open and in screeches three minis, scattering jump leads and pintery air fresheners, out steps a man in a flat cap looking slightly disappointed. Adrian, you were only supposed to blow the bloody doors off. Adrian thrilled climbs onto a pile of wintertowers and says, "You were only supposed to blow the bloody doors off." "I know Adrian, that's my line." Anyway, I can't keep this up. "Anyway, I've got a problem, I'm losing it very badly." "I used a claims management firm to handle a car finance mis-selling claim, but now I'm unhappy with them. Their service, their fees, the whole caper.

• 49:54Martin Lewis?

  I've complained but to no joy. So how do I escalate this Adrian? You work on that podcast." So Adrian, what we want to know.

• 50:03Speaker 05

  I'd say, hang on, I'll get Martin on, that's what I'll do then.

• 50:06Martin Lewis?

  So Adrian, are you Michael Caine or Michael Caint?

• 50:10Speaker 05

  Yeah.

• 50:12Martin Lewis?

  What's your answer? If you used a claims firm to handle your car finance mis-selling claim, but now think you were misled, who do you escalate it to? A, only, you could only go to the Claims Management Ombudsman, which is part of the Financial Ombudsman Service. B, you can only go to the Legal Ombudsman, which is regulated by the Solicitors' Regulation Authority. Or C, you may have to complain to both. Is it A, Claims Management Ombudsman? B, Legal Ombudsman? Or C, you may need to complain to both?

• 50:43Speaker 05

  See.

• 50:44Martin Lewis?

  Why?

• 50:45Speaker 05

  Um, well, because I generally know, from having listened to you, it's a bad idea to use a claims management company, or unnecessary, at least. And, I mean bluntly, I think you've probably designed the question to hammer home just how unnecessary it is to use a claims management company.

• 51:09Martin Lewis?

  Give him a hallelujah.

• 51:11Speaker 05

  Yes, here we go.

• 51:13Martin Lewis?

  Well done, mate.

• 51:19Martin Lewis?

  Okay, so, the regulator, the FCA, has recently launched a template letter on its website so you can complain about misled claims management firms. Yes, you can complain about the firms that you use to complain with. And the, if they don't satisfactorily handle your complaint, you can go to an ombudsman. Now, which ombudsman you go to depends on who regulates them. So, if they're regulated by the FCA, then you go to the Claims Management Ombudsman. If they're regulated by the Solicitors' Regulation Authority, you go to the Legal Ombudsman. But, frustratingly, if you were passed from an FCA-regulated claims firm to a solicitor, you may need to complain separately to each firm and go to both ombudsmen. So, C was the correct answer. Why were people misled?

• 52:04Martin Lewis?

  Well, the regulator says people were signed up without agreeing to it or were pressured into it. And we had an example on the podcast, the special pod we did a couple of weeks ago, of a woman who suddenly found that she got a letter from a claims firm because she'd just filled out their online, are you owed motor finance? And to not realise that that actually meant she was signing up to To the claims firm. In that case, make a formal complaint. You should not be paying them a fee. Say, I never signed up to you. Want to get out of it and go to the ombudsman. If you also feel you're misled about service, costs or chances of success by the claims firm, you can make that formal complaint. If you weren't receiving information you should have given, such as free details or cancellation, you make that complaint. And if you don't want to use the claims firm anymore, because you know it's a master address scheme and you know you can do it yourself,

• 52:46Martin Lewis?

  then they can charge you a reasonable fee if you want to leave. But the reasonable fee should be based on the work they've done and hardly any work has been done yet because the whole scheme is still on hold. So what the regulator says is do not pay an exit or other fees if you want an independent cheque first. CMCs and law firms are obliged to make it clear to customers, including on their website, that free ombudsman services are available. And I made it before the music played. Thanks for having me, mate.

• 53:13Speaker 05

  Beautifully done. You take it easy. Stay in an air-conditioned environment, no press-ups and limited walking for the rest of the day. That is what.

• 53:21Martin Lewis?

  Never, never.

• 53:22Speaker 05

  That's what I prescribe to you. Yes.

• 53:24Martin Lewis?

  No.

• 53:24Speaker 05

  Tie your shoelaces together. Do something with him. You've got too much energy and it's too hot for all that.

• 53:33Martin Lewis?

  Okay, so we're now into pod only and Adrian got a mastermind right. I know he doesn't believe it, but it does actually make me happy when he gets one right. It's true. And I've got, joining me is of course podcast producer Simon. We have loads of lifetime ISA questions. I want to do a few more tellers, but shall we get straight into the lifetime ISA questions and try and get through them and get people's questions answered?

• 53:54Speaker 05

  Well, to give you a little bit of daylight on the magic of podcasting, earlier today, they came over to me and said that the hallelujah was broken. It's automatically deleted and not been said. And there was a brief moment where I said, it doesn't matter.

• 54:06Martin Lewis?

  No fair.

• 54:07Speaker 05

  Because we have played for about five weeks. I'm glad I did actually get it, get it back up again. Otherwise I would have been in trouble. Yeah, we've got a heap of ISA questions that came in. Mel asks, for those of us using them for retirement, I'm self-employed. Will existing ISAs already opened continue to function in the same way? I.e. the 25% bonus on a maximum of £4,000 paid per year, paid in some weeks later. Many thanks.

• 54:33Martin Lewis?

  Under the current consultation, yes, they say the ISA will remain unchanged. So I don't see why that would change. Could change, but the proposal is it won't change.

• 54:44Speaker 05

  Rebecca wants to know, so will existing LISAs have the old terms, e.g. property price thresholds? Does aligned mean aligned in both directions? It will seem quite unfair if only newer LISAs have the higher threshold. Not that it is likely to affect my kids, but overall it ought to be aligned.

• 55:01Martin Lewis?

  So what they are proposing is the new first time buyer ISA threshold will align with the lifetime ISA and Help to Buy ISA. So they will all be given the same threshold as the current proposal. I think one of two things is likely to happen. Either that threshold has to be 450,000 or above everywhere in the UK, because you can't cut the lifetime ISA threshold for people who've already put money in it. It just goes against natural justice. I mean, they can, but yeah. Well, you can imagine what I'll be saying if they do do that and what many others will be saying too. Or they might decide not to align them, even though that's in the proposals. And if they're going to make the first time buyer threshold lower than the lifetime buyer threshold, then they would have to keep the lifetime

• 55:44Martin Lewis?

  ISA where it is. But currently, what they say is they're planning to align it. So I think they will all be the same from when the first time buyer ISA comes in.

• 55:53Speaker 05

  Carey's house is full of confusion. They have one daughter who has a full Help to Buy, but we think it will take too long to move it across, but it is capped at the max.

• 56:02Martin Lewis?

  Yeah, so that's £12,000 in there, yeah.

• 56:04Speaker 05

  One has a LISA putting the max in each year, so a new offer could put her in the same boat. Surely we should be encouraging our young people with a simple way to save for their first home and not keep changing the goalposts. What should they both do? Stay as they are? Question mark.

• 56:22Martin Lewis?

  I'm going to give you an answer, but don't call me Shirley. So I just need to say, I watched, I showed my daughter Airplane at the weekend for the first time. Hence, the surely joke is very in my head. Right. So it's very different scenarios. The Help to Buy ISA, the proposal is you'll be able to transfer that into the first time buyer ISA. Again, caveat, it is a proposal. So I think you would be fine with that one and may even be better off if they increase the property threshold. The lifetime ISA, you will be able to use concurrently with the first time buyer ISA under the threshold. So your other daughter may well be fine there. What should they both do? Stay as they are? Yes. My answer would be if those products are right for them now, I don't see any reason

• 57:06Martin Lewis?

  why right now you would change anything. Now, if they're not right for them, you're planning to buy properties above the threshold, then you might want to look at doing so depending on why I'm buying the properties. But assuming everything is right. And about the confusion, I think I have a little bit of sympathy here. I gave evidence to Treasury Committee about the lifetime ISA and I talked about its over complexity, this dual use of using it for retirement savings and a first time buyer, which are very different usage and the way the withdrawal penalty works, which is incredibly unfair. And the fact that the big problem with lifetime ISAs is mainstream providers just don't offer it because they're so scared they'll get done for misselling over the retirement savings element because people should be using their auto enrollment pensions

• 57:50Martin Lewis?

  ahead of a lifetime ISA that they just didn't want that risk. So they don't offer it. Well, clearly that's a broken product. So I think the new first time buyer ISA, which sounds to me like it'll be similar to the old Help to Buy ISA, which worked well, but with some of the problems fixed, the Help to Buy ISA was paid at the wrong point. It's paid at completion, not exchange. It should be paid at exchange. The putting money in a month wasn't very flexible for people. I think putting money in on lump sums is a much better way to go. So it sounds like they're going back to the old Help to Buy ISA, just having that simple product, which I think is probably a good move. Some will like the retirement savings element, but it's all very complicated. But unfortunately, going back to something simple means that you've now got three first time buyer

• 58:33Martin Lewis?

  ISA products, the Help to Buy, the lifetime and the first time buyer ISA itself that will be on the market consecutively. And that does add confusion in the transition.

• 58:42Speaker 05

  As many Help to Buy products as there are versions of student loan repayments?

• 58:46Martin Lewis?

  No, not as many. There are way more. There are five different plans. And then even within the different plans you have, but the deadline ends on that, i.e. when it's wiped depends within a plan. So yeah, we're not quite as bad as student loan repayments. But it's going to make things fun over the next few years when I get questions on this.

• 59:04Speaker 05

  Well, so John wants to know, he's got an age sensitive question. I'm 39 and thinking of opening a LISA before I'm too old. Do you think this is still wise?

• 59:14Martin Lewis?

  Well, you've probably heard my near rant on this earlier. Yes, yes, yes, yes, yes. Whether you should use it and put real money in is a bigger question. Whether you should open it, there's nothing in doubt. Put a pound in, get one open, get that facility for yourself.

• 59:27Speaker 05

  Rachel is linking the two topics that we've had today. Does the new interest on cash held in a stocks and shares ISA also apply to the stocks and shares LISA? Will there be restrictions from transferring from stocks and shares to cash like with other ISA types? If so, any thoughts on how to de-risk as people approach the access date for a stocks and shares LISA?

• 59:49Martin Lewis?

  Very interesting question, Rachel. I believe the proposal is this applies to all forms of ISA. So it does include the lifetime ISA. As how you would de-risk, well, short dated gilts would be one option, money market funds would be another. I'm not going to go in details in those. Go and do a little bit of reading. Short dated UK government gilts can actually be very similar to saving in NSNI, but there are actually some tax advantages over the capital gains that you would pay on it the way that it works, but it needs a bit of reading. And money market funds are more like cash funds. You can't have all of your shares ISA in money market funds, but if you have just a little in something else, so you could use those would be some of the options that if you wanted to de-risk

• 1:00:32Martin Lewis?

  just before you were going to be cashing it in for some purpose.

• 1:00:35Speaker 05

  Anna wants to know, my daughter has put £4,000 in a Tembo cash LISA in 2024. Can you move a cash LISA to a different provider or to a stocks and shares one once it's opened?

• 1:00:47Martin Lewis?

  Absolutely, yes. ISAs of all varieties must be transferable to new product providers. The way that you do it is you go to the new product provider, you fill in the application form, and within the application form, it will have transfer and you put the transfer details and you make sure the new provider does it. You don't take money out and open a new one because then you lose your ISA or LISA status in this particular case. And with a LISA, you would actually have to pay Withdrawal penalty to do that. So yeah, as long as they transfer it for you, there is no penalty. And you are allowed to move from cash to stocks and shares. Currently, you can move from stocks and shares to cash as well, but you won't be able to from next April.

• 1:01:27Martin Lewis?

  So yeah, you've got total flexibility and there's a rate war at the moment, as I mentioned earlier, Moneybox at 5.8, Plum at 5.6. So many people with cash license can easily increase their interest rate right now.

• 1:01:39Speaker 05

  Peter wants to know, I'm over 40 with a LISA of eight years. I opened a new one 18 months ago when I was 39 and transferred to Moneybox.

• 1:01:50Speaker 05

  The one-year bonus has now expired and the rate is only 2.8%. Can I still apply to open a new LISA and transfer this to a new service provider to take advantage of a better rate?

• 1:02:00Martin Lewis?

  To use parliamentary language, Peter, I refer you to the answer I gave a few moments ago. Yes, you can. The fact that you're now over 40 doesn't stop you opening an ISA to transfer. The only issue, and it's the same with Anna's question before you. I'm telling you what the rules are, but providers can have their own rules. They don't have to accept transfers and they don't have to accept transfers from people who are over 40. So it is provider-based, but I think most of the providers that I'm mentioning will allow you to open for a transfer. I'll have to double check that, but I think they will. Final straight, Simon. Let's do it.

• 1:02:36Speaker 05

  So AR will kick us off. If the £450,000 threshold had increased in line with inflation, what would it be? You'd think that'd give a clue as to what the revised threshold would be and hopefully help a bunch of people who are stuck.

• 1:02:51Martin Lewis?

  So I can answer the question. If it went up with inflation, it would now the £450,000 based on 2017 would be around £620,000. But I think actually it would be more likely to go up with average house prices, which would be a more sensible metric. And that's what's always been muttered and those of us who've been campaigning have been campaigning on that because we think that's more arguable. So that would be £550,000. Whether you can use that as a read across to what the new threshold should be is a very different matter. It just depends on what the government's thinking. They may as well say, hey, we don't want to pelt people who buy houses over 450 grand. So I don't think you can do the read across, but those are the answers.

• 1:03:30Speaker 05

  Well, last but by no means least, we've got John. Can I use my LISA to contribute to my partner's existing mortgage? If I don't own the home, what are the pros and cons of doing this?

• 1:03:41Martin Lewis?

  No, effectively you would be having to get a new mortgage to buy a new property. So you could potentially buy part of your partner's property separately. You'd have to talk to a solicitor about that one, but it is quite difficult to do. I think the real key is you want to save your ISA if and when you and your partner buy a new property together and then you will be able to use it. But it is very difficult to do a workaround within the rules in your situation unless you're going to take ownership of that property and get a mortgage yourself to take to take part ownership of that property.

• 1:04:15Speaker 05

  And with that, you have managed to complete the questions.

• 1:04:18Martin Lewis?

  Thank you very much. We've done cash ISAs, we've done help to buy ISAs, we've done lifetime ISAs. And for the first time ever on this podcast, we've done the first time buyer ISA and I'm done.

• 1:04:37Martin Lewis?

  That's it for this week. We tend to put out a new podcast every Thursday and Monday. Our Monday one is our question time episode where you can ask me absolutely anything and everything you like within reason, close brackets. I'm not sure I open the brackets, but I close them anyway. That's what matters. If you've enjoyed today's show, please tell your friends you've been listening to the Martin Lewis podcast and why not subscribe? And hey, why not leave us a review? A nice one would be lovely. Then your pockets will be pleased with you. And if you haven't enjoyed it and you've been listening this long, you've only got yourself to blame.