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What might waiting a decade to start a Lifetime ISA cost?

The article from Fool.co.uk discusses the potential financial implications of delaying the start of a Lifetime ISA (LISA) by a decade. It highlights that starting a LISA at age 18 versus age 28 can significantly impact the final savings amount due to compound interest. For instance, if someone contributes the maximum annual allowance of £4,000 from age 18 to 50, with a 5% growth rate, they could accumulate around £340,000. However, starting at age 28, the same contributions would only yield approximately £190,000 by age 50. The article emphasizes the benefits of early investment, the government bonus of 25% on contributions up to £1,000 per year, and the tax-free growth potential of LISAs. It also notes that while LISAs are designed for first-time home buyers or retirement, the penalties for early withdrawal for other purposes can be substantial, making the timing of contributions crucial.

Read the Full The Motley Fool UK Article at:
[ https://www.fool.co.uk/2024/12/14/what-might-waiting-a-decade-to-start-a-lifetime-isa-cost/ ]