Savers who opened a Lifetime Isa (Lisa) in the 2017-2018 tax year are estimated to have received a £114 million in government bonuses.
Figures from Hargreaves Lansdown estimate that savers using the tax-free account have received an average bonus of £812.
Lifetime Isas were introduced in April 2017 as an alternative to Help to Buy Isas, which will be withdrawn on 30 November 2019.
These tax-free accounts allow people to save up to £4,000 a year, which can be put towards either a first house purchase or retirement, with savers receiving a 25% bonus from the government each year.
These tax-free savings accounts can be opened by those aged 18 to 39, but money saved can only be used to buy a first house or on retirement (at 60-plus), otherwise savers who withdraw their cash will forfeit their bonus.
Lisas can be used to buy properties worth up to £450,000 whereas the limit on properties bought using a Help to Buy Isa is much lower at £250,000 (£450,000 in London).
Hargreaves Lansdown estimates that over 140,000 Lifetime Isas were opened in their first year, of which around 40,000 were Stock and Shares Lisas opened with Hargreaves Lansdown.
The investment giant says its account holders received total bonuses of £32 million in the scheme’s first year, estimating that, in total, Lisa holders have pocketed £114 million in bonuses.
Meanwhile, Skipton Building Society, currently the only provider of Cash Lifetime Isas, says the average age of its customers with a Cash Lisa is 27 and has saved £2,759.
More than 100,000 people have opened a Lifetime Cash Isa with the building society, with Skipton reporting that 73% of account holders are using it to save for a home and just 15% for retirement. Skipton customers who opened their account in the 2017-2018 tax year received over £80 million (of the £114 million) in government bonuses.
Sarah Coles, personal finance analyst at Hargreaves, says: “An £812 bonus is a decent chunk of free money by anyone’s standards and will help people to hit their savings and investment goals quicker.
"It’s a useful reminder of the rewards on offer for those who take advantage of the Lisa – if you’re eligible for the scheme and saving for a property, you’d need a very good reason to turn down this sort of free cash.”
Kris Brewster, head of products at Skipton, says: “Getting on to the property ladder continues to be a major aspiration and challenge for a new generation of potential homeowners and the Lifetime Isa is an essential enabler for building a deposit.”