What is a Lifetime ISA?
A Lifetime ISA, often called a LISA, is a type of ISA designed to help you buy your first home or save for later life. You can hold cash, investments or both, depending on the provider. Like other ISAs, any interest or growth is tax-free.
Who can open one
You must be aged 18 or over but under 40 to open a Lifetime ISA, and you need to live in the UK, with some exceptions for the armed forces and Crown servants overseas. Once open, you can keep paying in until you turn 50.
The 25% bonus
You can pay in up to £4,000 each tax year, and the government adds a 25% bonus, up to £1,000 a year. For example, if you pay in £4,000, the government adds £1,000.
What you pay into a Lifetime ISA counts towards your overall ISA allowance of £20,000 a year.
Using it for your first home
You can use your Lifetime ISA, including the bonus, towards your first home without a charge if:
- the property costs £450,000 or less
- you buy it at least 12 months after your first payment into the Lifetime ISA
- you buy with a mortgage, using a conveyancer or solicitor, who receives the money directly from your provider.
If you're buying with someone else who also has a Lifetime ISA, you can both use your Lifetime ISAs.
Using it for later life
From age 60, you can take your money out for any reason without a charge.
The withdrawal charge
If you withdraw money for any other reason, you'll usually pay a 25% charge. Because the charge applies to the whole amount you withdraw, including the bonus, you could get back less than you paid in.
For example, if you paid in £4,000 and received a £1,000 bonus, your account would hold £5,000. Withdrawing it all for another reason would cost £1,250, leaving you with £3,750, which is £250 less than you paid in.
Is a Lifetime ISA right for you?
A Lifetime ISA can be valuable if you're confident you'll use it for your first home within the price limit, or keep it until 60. Think carefully if:
- you might need the money for something else
- you're likely to buy a home costing more than £450,000
- you'd be saving for later life instead of paying into a workplace pension that includes employer contributions.
Lifetime ISA rules have been under review, so check the latest position on GOV.UK before you open one.
Common questions
Can I have a Lifetime ISA and another ISA?
Yes. You can pay into a Lifetime ISA and other ISAs in the same tax year, as long as your total payments stay within your £20,000 allowance.
When is the bonus paid?
The bonus is claimed by your provider and added to your account. Check with your provider how often this happens.
What if I don't buy a home?
You can keep the money in your Lifetime ISA until you're 60 and then take it without a charge. Withdrawing it earlier for any other reason usually means paying the 25% charge.
Sources
We checked this guide against these sources on 8 October 2026. Rules and allowances can change, so always check the latest position on GOV.UK.
- GOV.UK: Lifetime ISA
- GOV.UK: Who can open a Lifetime ISA
- GOV.UK: Withdrawing money from your Lifetime ISA
- GOV.UK: How ISAs work
- MoneyHelper
This guide is general information, not personal financial advice. Read our full disclaimer.