If they followed up on their pledge this would amount to an enormous £172billion cash injection. Many families plan to make this money work harder by saving it into a tax-free Lifetime Isa, or Lisa, a tax-free savings product aimed at first-time buyers.
As young adults battle against high house prices and the cost-of-living crisis, family members are keen to help them buy their first home.
Lifetime Isas can help. They’re open to savers aged between 19 and 39, although after setting one up, they can continue to contribute until age 50.
For every £4 saved in cash or invested in shares, the government adds £1. Savers can pay in up to £4,000 a year, which would give them the maximum £1,000 annual bonus.
Someone who took out a Lisa at age 18 and contributed every year until 50 would get £32,000 of free money, assuming rules stay the same. The money must be used to buy a first property, otherwise saved until at least age 60 for retirement. Other uses are penalised.
More than 1.2million adults aged over 50 have topped up a family member’s Lisa since they were launched in April 2017, according to new research from specialist financial services company OneFamily.
Customer operations director Jackie Davies said: “We see a huge appetite among young people for the Lifetime Isa, but many are struggling to max out their account each year due to high rent and living costs.”
Davies said the Lisa offers a real opportunity for older people to make their generosity go further. “It can put family members one step closer to buying a home.”
Student nurse Erin Hadley, 19, is one of those likely to benefit as her mother saves into a Lisa with OneFamily.
Erin’s mother encouraged her to open the Lisa when she turned 18 and has helped her max out her savings so she can buy a home when she finishes her studies at The University of Manchester.
She said: “My mum helped me open my lifetime Isa a couple of weeks after I turned 18. I’d had a child trust fund account which my family had been adding to.
“When I was able to access the money, my mum said it was a good idea to put it into a Lisa. I didn’t know much about them at the time, but now I’m glad I have one and have managed to get the free bonus.”
Erin dreams of buying her first home after she finishes university, but knows it won’t be easy in the current market.
She said: “Ideally, I’d like to stay in Manchester, but it just depends on where I can get a job within the NHS.”
Erin added: “It’s difficult looking into the future and knowing exactly what I’ll want and where I want to be, but it’s good to know that I will have the savings there when I need them.”
Davies said its research shows that people want to help their younger relatives get on the housing ladder if they can. “The Lisa is a great way to give an extra boost and help family members get one step closer to buying a home.”
While 22,091 people contributed to a OneFamily LISA in the 2023/2024 tax year, only 14% got the full bonus by paying in the maximum £4,000.
