Lifetime ISAs are a popular option for savers who are aiming to purchase their first home. The Lifetime ISA scheme was launched in 2017 and it was designed to replace the help to buy ISA scheme, which is now closed. Lifetime ISAs offer great benefits but they do have rules in place. The bonus awarded through the ISA can only be used for houses up to £450,000 and it must be the person’s first residential home.

“Plus, there’s a rule that says to use the bonus for a home, you need to have had it open for at least a year.

“So, putting at least £1 in there now gets the clock ticking on that year, so that if and when you do have money to put in it, and want to buy a house quickly, you’re ready to go. Of course, if you can save more, then do.”

He went on to detail where the best Lifetime ISAs can be found: “There are two types of LISAs. Cash LISA and Stocks and Shares LISA.

“There aren’t many top cash LISAs to choose from, as not many providers offer them, but top is app-based MoneyBox which pays 1.4 percent AER (your cash is actually saved with OakNorth Bank) and then it’s Nottingham BS paying 1.25 percent AER.”

Martin moved on to the question of whether Lifetime ISAs are better than pensions for retirement savings: “That’s a complex question, but for most people, no. While unlike pensions it does allow early withdrawals (for a penalty) in most cases a pension gives you more.

“This is because with a pension, you usually save from gross (pre-tax) income – which for basic-rate taxpayers is a bit like a 25 percent boost in its own right, the same as a Lifetime ISA. For higher-rate taxpayers, it’s like a 66 percent boost, which smashes the Lifetime ISA.

“Plus, if you’re employed, the auto-enrolment scheme means that if you save into your pension then your employer has to as well, which you don’t get from the Lifetime ISA.

“So in simple terms the only time the Lifetime ISA even matches pensions is for basic-rate taxpayers who are self-employed.

“Even then, the Lifetime ISA, unlike a pension, counts as savings, so it can diminish your benefit entitlement.

“Therefore, for most people the Lifetime ISA should only be used at best as a secondary way to save for retirement.”