Martin Lewis doubles down on account 'everyone' aged 18-39 'should get' with 'talking nonsense' swipe

Martin Lewis doubles down on account 'everyone' aged 18-39 'should get' with 'talking nonsense' swipe A visibly frustrated Mr Lewis hit out at those who said he 'doesn't know what he's talking about' Martin Lewis has issued a frustrated 'plea' in the wake of a video on a type of tax-free account for people aged 18-39. On Friday, the money-saving expert posted a video about Lifetime ISAs (LISAs), urging everyone eligible to open one and put just £1 inside. Changes announced in the Budget mean that the withdrawal penalty for buying a house worth more than £450,000 has been abolished. Martin said these changes made an 'even stronger' case for people to open one, even if you already own a home. A LISA can be used for people to either purchase their first home, or save money tax-free with a 25 per cent Government bonus for their retirement. However, he lashed out after receiving some ill-informed criticism in the video. He explained: "So, I've just posted a video on social media, and I need to tell you I am somewhat frustrated. I've seen a number of comments from people who, frankly, why would you comment when you clearly don't know factually what you're talking about? "So, this was a video about the Lifetime ISA, and why everyone should, who's 18 to 39, should get one and put a pound in it. Do go and watch it. Now, some of the comments I've had include, 'He doesn't know what he's talking about. You should put your money in an S&P tracker', or, 'He doesn't know what he's talking about. There's a horrible penalty if you buy over £450,000'. So, let's deal with both of those, shall we?" Lifetime ISAs The LISA - which is available in both cash and stocks and shares versions - was designed for either buying a first home, or putting money aside for later in life. People can put in a maximum of £4,000 a year until they are 50, but the first payment must be made before their 40th birthday. The Government adds a 25 per cent bonus to all funds paid in. You can only withdraw the money to buy your first home, when you hit 60, or if you are terminally ill with less than 12 months to live. There is a 25 per cent withdrawal penalty if you withdraw cash or assets for any other reason. There was a penalty for buying a home ovver £450,000 but with property prices increasing, and the already-high value of property in major cities such as London, this faced repeated criticism. Chancellor of the Exchequer John Healey removed that penalty in his 2026 Budget. 'Just a little plea' Martin said: "Well, the first one is a Lifetime ISA can be a Cash ISA or a Shares ISA. If you want an S&P 500 tracker, and it's right for you, you can do it inside a Lifetime ISA, and then you can get the bonus on top for buying your first-time property or retirement when you're aged 60. "I think there's a fundamental misunderstanding there. I often get this when I'm talking about ISAs or or pensions or Lifetime ISAs: they are all tax wrappers. They all have different treatments of the way that you're taxed, whereas an S&P 500 is a choice of investment you can put inside that tax wrapper. "So, you can have a Shares ISA with an S&P 500 tracker in it if you want, but then, unlike outside of an ISA, you don't pay capital gains tax on it, and you don't pay dividends tax. "As for the point about the penalty, well, literally if they had watched the video, the whole point is, in the Budget, if you now buy a property over £450,000 and you have LISA money, you can get your money out without paying that effective 6.25% fine that you would have done a week ago. "And, so, it means there isn't really the risk anymore. You get your money back and the interest, just as if you'd put it in a normal Cash ISA, and better than a savings account because it's tax-free. "So, just a little plea, right? I love constructive suggestions. I don't mind critique. But why aggressively state a fact without at least having the courtesy to yourself and to other people on social media to check out whether you're talking truth or talking nonsense See ya. And that was to the small number of people who do that, not to the large number of people who don't." 'Watch the whole video' A quick glance at the original video shows some of the comments which Martin may have been frustrated by. One person asked: "If you already own somewhere surely you can’t benefit?" Martin replied: "watch the whole video." "Do these count if my wife is a first time buyer and we buy our next home on a joint mortgage? As I wouldnt be a first time buyer but my wife is?". Martin answered: "yes she can use it," only for someone to answer: "only if house less than £450000." Another person said: "ISA has a strict £450,000 property price cap and a 25% penalty for early unauthorized withdrawals." What did Martin say? In the initial video, Mr Lewis explained: "If you're aged 18 to 39 and you don't have a Lifetime ISA, I'd strongly suggest you get a quid in one now, even if you already own a home. And the reason for this has all got even stronger since the Budget. "We now know, in April 2029, the Lifetime ISA will be replaced by the First-Time Buyer ISA. But as long as you've opened one before then, you can still use and get the bonus on the Lifetime ISA after that. Now, the Lifetime ISA bonus is you can put up to four grand a year and you get 25% added on top, so that's up to £1,000 free each year. And that can be used towards a first-time buyer property under £450,000, or towards saving for your retirement - you can take the money out aged 60 with no penalty. "However, there is a rule with the Lifetime ISA that you can't get the bonus as a first-time buyer unless you've had the LISA open for a year. So, one reason for putting a pound in as soon as possible is you get that clock ticking: tick-tock, tick-tock, tick-tock. Even if you're not ready to buy now, as long as it's more than a year away, once you are, then you can just dunk the £4,000 in, and you get the £1,000 bonus straight away, and you can buy with it. "And in the Budget, another change that happened, too, is now, if you're buying a property over £450,000, you won't face a penalty to get your money out for the deposit. You won't get the bonus, but you'll get back what you put in, plus interest, so the risk of having a Lifetime ISA is less. "If you do get a Lifetime ISA and you want to use the First-Time Buyer ISA, you will be able to get the bonus on both, you just won't be able to contribute to both in the same tax year. So, you can see why it's worth having if you're going to be a first-time buyer, but why if you already own a home? "Well, while I generally put pension saving as better for retirement than Lifetime ISAs, for some people, especially basic-rate, self-employed people, the Lifetime ISA can be a decent option. And as the new ISA that's replacing it doesn't have a retirement saving option, just in case it's good for you in 2037, you may as well put a pound in now so that you have the facility then to save in a Lifetime ISA for your retirement if it becomes worthwhile." Ensure our latest health news always appears at the top of your Google Search by making us a Preferred Source. Click here to activate or add us as Preferred Source in your Google search settings First-Time Buyer ISA The LISA itself will be replaced by a new First-Time Buyer ISA, which is scheduled to launch in April 2029, it was also announced in the Budget. Martin has been campaigning for this change since 2023 This led Martin to say: "Delighted after years of fighting for it that the Lifetime ISA (LISA) penalty for those buying a house of £450,000-plus will be reduced from 25% to 20%. In practice (as you got a 25% bonus when putting money in) this means while you won't get the bonus, you'll get back what you put in, plus interest. I've long suggested this and I am pleased the Chancellor listened. "It means there's no risk to putting money in a LISA if you're definitely going to buy a house. As if you're priced out, and have to go above the threshold, you still get your savings and the interest, you just don't get the extra. This will be a great relief to many young people. "The Chancellor has confirmed too that the First Time Buyer ISA replacement will go ahead, but that will take a few years, I suspect. The LISA will remain for now, and should still be viable even once it's closed to new starters."