Two-thirds of young British adults are missing out on over £3.1 billion in government bonuses by not opening a Lifetime ISA. Research commissioned by financial technology company Plum reveals that 65 percent of 18 to 28-year-olds have not opened such an account, forfeiting an average of £512.77 each in free money annually.
The Lifetime ISA offers a 25 percent government bonus on savings, capping at £1,000 per tax year. The funds can be used for purchasing a first home or building a retirement pot. Those who contribute the full £4,000 annual allowance from age 18 could accumulate up to £32,000 in government bonuses by age 50.
Rajan Lakhani, Head of Money at Plum, said: «There is a lot to know about personal finances, but a LISA isn't something you want to ignore.» He added: «It's one of those things where the longer you leave it, the earlier you'll probably wish you'd have got one.»
Why Young People Struggle to Save
The research, conducted by OnePoll.com, identifies significant barriers preventing young adults from saving. Food expenses topped the list of obstacles, followed by inadequate earnings cited by 29 percent of respondents. Utility bill costs affected just over a quarter, while 18 percent blamed online shopping for depleting their funds.
Nearly a third of young adults have never heard of Lifetime ISAs, and 57 percent feel overwhelmed by the variety of savings products available. Only 11 percent confessed to lacking confidence in their grasp of personal finance. Among those who are saving, 18 percent aim for a first property deposit and 13 percent are building a retirement fund.
Lakhani emphasized the importance of early action. «When you're in your 20s, it can feel as though you have your whole life ahead of you to get on top of your savings,» he explained. «But anyone who's in their 40s now will tell you, those years go pretty fast and you'll wish you had started earlier. A little goes a long way, especially the earlier you start.»
Note: This article was created with Artificial Intelligence (AI).
