Arron Humberston, 25, used a specific type of savings account to help him get on the property ladder
Arron with his fiancée Shannon
Buying your first home is no easy feat – but one man has revealed how he managed to get £3,000 free to help go toward his deposit.
Arron Humberston, 25, used a Lifetime ISA to help him get on the property ladder. A Lifetime ISA is a savings product designed specifically for first-time buyers or for your retirement.
You can save up to £4,000 every tax year into a Lifetime ISA and you get a 25% bonus from the Government. This means you can get up to £1,000 free every tax year.
But the caveat is, you have to use the money saved to buy your first home, or for your retirement. If you are using it to buy a property, the property must not be worth more than £450,000.
If you try and access your Lifetime ISA savings for any reason other than buying your first home or retirement, you face a 25% penalty charge.
This not only wipes out your bonus, but also part of your original savings.
In total, Arron saved £13,000 of his own money into his Lifetime ISA but the account was worth £20,000 by the time he purchased his first home.
He received more than £3,000 in free Government bonuses and around £4,000 in investment growth, as his Lifetime ISA was invested in stocks and shares.
Now settled in Leicester with his fiancée Shannon, their six‑year‑old son Braylen, their cocker spaniel Milo, and having recently welcomed their new baby, Arlen, getting the keys last year marked an important milestone for the family.
Arron said: “We picked up the keys in March last year and it still feels surreal to call it ours. It’s a three‑bed semi‑detached house with a driveway and a lovely garden, exactly the kind of place we hoped for.
“I first heard about Lifetime ISAs when I was 18. I’d come into some inheritance when I was younger and as I got older my stepdad encouraged me to think more seriously about saving.
“When he explained how the Lifetime ISA worked, especially the 25% bonus, it felt like a lightbulb moment. It really did seem like free money and it made getting onto the property ladder feel possible.”
He added: “In my first year, I paid in a lump sum to hit the £4,000 limit. I then tried to max out my allowance a few times over the years to make the most of the bonus. The extra 25% makes such a difference.
“I saved just over £13,000 into my lifetime ISA, and the government bonus added more than £3,000. Because my LISA was invested in stocks and shares, it also grew in value.
“By the time we were ready to buy, my account had reached just over £20,000, giving me around £7,000 extra overall between the bonus and investment growth.”
Arron opened his Lifetime ISA account around eight years ago through OneFamily. Other providers that offer Lifetime ISAs include Moneybox, Tembo, Plum, Bath Building Society and Skipton Building Society.
Most major high street banks in the UK do not offer Lifetime ISAs.
A new version of the Lifetime ISA is set to launch in April 2028 and this will only be available to first-time buyers. You will no longer be able to use a Lifetime ISA for retirement savings.
It is not known if the house price threshold will rise with the new Lifetime ISA.
The Government confirmed plans for a consultation on the Lifetime ISA in documents published after the Budget last November.
