Guide to Lifetime ISAs

You’re able to pay into one Lifetime ISA in each tax year, as well as a cash ISA, stocks and shares ISA, and an innovative finance ISA, within the overall ISA limit of £20,000 in the 2023/2024 tax year.
More information is available in our guide to ISA allowances.

You’re able to open a Lifetime ISA if you’re aged between 18 and 39. You can save up to £4,000 each tax year, every year until your 50th birthday.
The government will pay an annual bonus of 25% (capped at £1,000 p.a.) on any contributions you make.
Funds can be withdrawn tax-free at any time in order to buy a first home worth up to £450,000, and from age 60 for any purpose.
You can open more than one Lifetime ISA, but will only be able to pay into one in each tax year.
 

The government will provide a bonus of 25% on contributions made during the tax year.
This bonus is paid back to the Lifetime ISA on a monthly basis.

To buy a first home

The savings and the bonus can be used towards a deposit on a first home worth up to £450,000.
Accounts are limited to one per person rather than one per home – so 2 first-time buyers can both receive a bonus when buying together.

At retirement

The savings and bonus can be accessed tax-free, without penalty, once you’ve turned 60 years old.

Other withdrawals

You can make withdrawals that aren’t for a first house purchase or retirement, but a 25% charge applies to the amount being withdrawn. This returns the bonus element of the fund to the government, with an additional charge. You will still have access to your savings and any interest earned on them, minus the charge. Please bear in mind that if you make a withdrawal before you receive your first bonus, the charge will still be made so you won’t be able to take out as much as you deposited.
In certain circumstances – eg, a terminal illness or upon death – there’ll be no charge to close the account.

Yes, tax-free interest will be earned on all balances.

You can carry on saving towards retirement, or withdraw the funds subject to the 25% withdrawal charge mentioned above.

The original LISA can be re-opened, and the amount you’d saved replaced.