Cash rewards from our partner retailers will now be paid into a Lifetime ISA (LISA) 🤑

Since we started taking pre-launch signups 2 weeks ago, lots of you have been reaching out with excellent feedback (keep it coming!) and questions about Homewards.

And, we listened 👂.

We want to build Homewards in collaboration with our members, you. That means taking your feedback and questions on board to create the product you want.

These are some of the questions you’ve been asking us largely on the same topic of “what happens to my cash rewards?”:

“What exactly can the cash rewards be used for?”

“Where are the cash rewards held?”

“Will I earn interest on the savings?”

“How do I withdraw the savings?”

So, based on the above, we wanted to clarify rather than be unwittingly vague and decided that the best solution would be to put your cash rewards from Homewards into a Lifetime ISA (LISA).

This will give you the control and benefits that come with a LISA, including a 25% tax-free bonus on your savings — effortlessly boosting you even closer to your goal of owning a home 🚀.

To add further clarity to your questions and how it’ll work:

1. What exactly can the cash rewards be used for?

Cash rewards are to be used towards a first-time buyer’s home deposit (or towards retirement). The reason being, only those buying their first home can benefit from the LISA’s 25% bonus towards a home deposit.

2. Where are the cash rewards held?

Once we go live, you’ll be requested to either open a new Lifetime ISA or connect your existing one.

The cash rewards earned by you, and your family, will then be funnelled into your Lifetime ISA — with full FSCS protection up to £85,000.

3. Will I earn interest on the savings?

Yes. You will have the option of choosing either to store your money in a Lifetime Cash ISA (typically paying around 1%+ at time of writing), or invest into a Lifetime Stocks and Shares ISA (capital at risk).

4. How do I withdraw the savings?

The withdrawal of funds will be dictated by the Lifetime ISA terms. A Lifetime ISA will only allow you to withdraw your funds, without penalty, if used towards a home deposit or your retirement.

If you wish to withdraw the funds for anything other than those options, then you will face a 25% penalty.

What actually is a Lifetime ISA?

For those of you who are not familiar with the Lifetime ISA (LISA), it is set to replace the more well-known Help to Buy (H2B) ISA (which ends on the 30th November 2019).

Here are the key points you’ll want to know:

• You can only open a LISA between the ages of 18–40. But you can continue contributing into it until you hit the age of 50.
• You’ll receive a 25% tax-free bonus, effortlessly boosting savings as long as they are used towards a home deposit (unlike the H2B ISA that can only be used on the exchange deposit), or retirement.
• To withdraw the savings and bonus for a home deposit, the value of the property must be under £450,000 and be the only home you own, that you intend to live in.
• The max. contribution per year is £4,000 (meaning a juicy £1,000 bonus per year 💰). And the max. bonus achievable is £32,000.
• You can only access the bonus 12 months after you put money in the account.
• You and your partner can both open one, meaning double the amount of bonus available if you buy together i.e. £2,000/year bonus.
• You can transfer your H2B ISA into a LISA, but it will eat into your max. contribution allowance for the year.

Hopefully, this clarifies a question that many of you have had. If not, please reach out via hello@homewards.io.

Join Homewards today and you’ll get entered into a competition to win £1,000 towards a home deposit 💰#winning.

Refer your family and friends to get more competition entries 🗳 and VIP passes to get the app first when we launch 🎟.

Sign up now 👉 https://www.homewards.io

And if you have any questions or thoughts on this article, please add in the comments section below 👇.

Thanks for reading,

The Homewards Team.