The government of UK has unveiled plans to launch a new life-time savings scheme in April 2017 that will allow people to save for their first home purchase and retirement.
The new Lifetime Individual Savings Accounts (ISAs), announced in the 2016 budget, will be targeted at people under 40 years of age.
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The scheme will allow individuals to make annual savings of up to £4,000, which will be supplemented by an additional 25% bonus from the government.
Contributions can continue to be made and the bonus paid till the saver reaches 50 years.
The funds can be used to buy a first home any time from 12 months after opening the account.
The limit for property bought using the funds will be set at £450,000, which will apply across the nation.
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By GlobalDataUsers can withdraw their savings for any other purpose, but will have to refund the bonus paid on that part to the government.
After reaching 60 years, users can take out all the savings free of tax.
"The government wants to help young people save flexibly for the long term and ensure they do not have to choose between saving for retirement and saving for their first home," the government said in the budget.
