Individuals can start saving money into a Lifetime ISA for the very first time from 8 June 2017.
Skipton Building Society will become the first provider to launch the product, with an interest rate of 0.5%.
Savers need to be aged 18 to 39 to open a Lifetime ISA where they can contribute up to £4,000 each year until the age of 50.
An added 25% bonus from the government will be provided to top up the savings, up to a maximum of £1,000 per year.
The Lifetime ISA limit will count towards your annual ISA limit (£20,000) for the 2017/18 tax year.
The government bonus will be provided at the end of the 2017/18 tax year – this will be paid within 28 days of 6 April 2018 with interest earned on the bonus from the date received from HMRC.
The bonus will then be based on contributions made each month from 2018/19.
Funds saved, including the bonus, can be used at any time to purchase a first home after 12 months of opening the account. The property purchased must be worth less than £450,000.
Savings can be withdrawn after the age of 60 to support your retirement. Money accessed or withdrawn before reaching 60 will result in a 25% exit charge.
For any help or advice with financial planning talk to RPD