Lifetime ISA: How this Customer Upgraded from a London Flat to a Four-bed House
Considering opening a Lifetime ISA to save for your first property? Scarborough-based Ebow Duncan did just that and says, while putting aside the funds was challenging, he was able to change his life within a few short years. Read on to discover how…
What is a Lifetime ISA?
A Lifetime ISA is more than just a savings account; it’s an investment in your future.
With no fees, our interest rate of 4% (AER) and a 25% Government bonus added to what you save, our Lifetime ISA could ensure you’re well on your way to a deposit for your first home.
Lifetime ISAs are for anyone, aged from 18 to 39 years old, who is keen to get on the property ladder (or wants to save for later life) and needs some help reaching their savings goals.
Meet Ebow…
Lifetime ISAs are designed to help you take your first step towards securing the keys to your first home, just like Ebow Duncan. He became a customer of ours and went from living in a small flat in London, to owning a large, four-bed property in Yorkshire.
After relocating to the UK from Ghana, Ebow – who works in adult social care – soon found a flat in the capital and began paying an extortionate monthly sum on rent and bills.
It wasn’t long before he’d stumbled across the First Home app, which offered more details about the Lifetime ISA (LISA) – specifically, Unity Mutual’s LISA.
Thirty-eight-year-old Ebow soon learned that by putting his savings into a LISA, he’d be treated to a 25% Government bonus on any funds he added (up to a maximum of £4,000 a year). Making it his mission to save the maximum yearly amount, Ebow slowly but surely put away any spare money he had.
Before long, he’d raised the £4,000, which meant he could receive £1,000 from the Government by the year-end. He carried on saving in this way until he had enough to secure the family home he had his heart set on.
Here's How Ebow Made his Dream a Reality
Ebow set about creating a set of budgeting tips for himself, as well as listing all his regular outgoings. By doing so, he could see where he was overspending and could cut back in a bid to put aside £4,000 over 12 months.
“I wrote down my monthly expenditure and worked out what I had left over”, he told us.
Ebow then divided that amount by the number of days in the month and settled upon a daily figure. He worked out that, after paying his rent in London and putting aside what he needed to save in his ISA, he’d have £5 left to spend each day.
To ensure he didn’t spend more than his daily allowance, he had a few tips firmly in his back pocket. One of them was this: “I didn’t spend unnecessarily on things I didn’t need.”
For Ebow, this meant cutting out takeaways and making use of an app called Plum, which helps you save any extra funds by rounding up your spending and putting aside any ‘spare change’ on your behalf.
“I signed up for Plum and it helped me put money aside, so at the end of the month I was able to push it into my bank account, then transfer it to my Unity Mutual ISA.”
Working out that he’d need to save around £333 per month to reach his £4000 annual savings goal, Ebow took on a part-time job (on top of his full-time work) to make his dream happen.
He’d also batch cook his meals in advance, which helped him avoid not just takeaways but pricier ‘grab and go’ meal deals during his lunch break at work.
“If you batch cook, you’re only turning on your cooker once a week too,” says Ebow, who also adds that those who are serious about their financial future need to accept that they have to make similar cutbacks to reap the rewards.
How important was the 25% Government bonus in helping Ebow achieve his financial goal?
“It was very, very important”, he tells us, adding that it was a big catch for him and what prompted him to sign up for the Lifetime ISA in the first instance.
“It was a no-brainer – and I was on board,” Ebow tells us. “I was able to save £10,000 within two years”, he adds, stating that the 4% interest offered by Unity Mutual meant that he’d earned £500-600 on top of the money he’d already received thanks to the Government bonus.
Before long, he could sign on the dotted line for a four-bedroomed semi-detached house by the coast.
“The Lifetime ISA is a very good thing for young people.” continues Ebow. “It appears that most people are not well-informed [when it comes to getting on the property ladder].
“Rent was extremely high in London; I was paying £1,200 a month – and now my monthly mortgage payment and bills are less than that.
“The 25% bonus really did help me buy my house – at the age of 38, and just two years after moving to the UK. When I head home now I feel happy – and I’ve been able to make my stamp on the place.”
What was the process like?
Ebow felt the Lifetime ISA terms and conditions were easy to understand – and an app called First Home Coach was what led him to working out if he qualified for the account.
“All I needed was £1 to set up the Lifetime ISA,” he says, adding: “Unity Mutual sent me a form to fill in and the process was smooth. The customer service was also on point.”
When it came to buying his first property, Ebow said everything went without a hitch too.
“Anything is doable in life, but you do need to sacrifice a lot and put the hard work in – that’s what I tell my friends and family.”
Ebow decided he was going to own a house in England in under two years and that’s what he did. Sure, it was challenging, he says, but incredibly worth it.
“I set myself goals. I knew the house I wanted, and the location. It’s a lot of work. If you don’t do these things, it won’t happen by fluke.”
Ebow says he didn’t have any financial help, with no family nearby. “I just realised I needed to put in the work and stop buying things I didn’t need. Anyone who’s thinking of doing the same, says Ebow (who lives with his wife and hopes his three-year-old daughter can move to England soon too) should ‘set specific, smart, time-bound goals’.
Like Ebow, would you also like to save for your first property with a Lifetime ISA? He has some advice for anyone who’s keen to start: “Just have the zeal and the willpower.”
“Give yourself a maximum of three to four years. If you pay rent for the rest of your life, the money goes down a bottomless pit and it becomes hard to put money aside for a mortgage. Buying a property means I’m investing into my future and I’m building wealth for my generation too. I’d like to become an advocate for young people who are also keen to buy their first home”
As well as letting all his friends know about the benefits of the LISA, Ebow has set his wife up with an account of her own too.
Want to get started with a Lifetime ISA?
If, like Ebow, you’d like to make a firm move towards your savings goals, head here for more information (including terms and conditions) and do not hesitate to contact us with any questions.
