George Osborne has announced a new government-backed ‘Lifetime ISA’ which can be used by younger people to buy homes.

Under the scheme, people under 40 years of age can put up to £4,000 in an ISA and the government will put in £1 for every £4 saved.

The funds can be used to buy homes of up to £450,000.

Chancellor Mr Osborne said: “Young people can put money in, get a government bonus, and use it either to buy their first home or save for their retirement.”