Lifetime ISAs (also known as LISAs) and Help to Buy ISAs (HTB) are government initiatives to help you save for the future. Both ISAs are suited to first time home buyers and both offer big cash bonuses from the government. While the Help to Buy ISA is no longer available to open as a new product, if you hold an existing HTB ISA you can continue to pay in and use this account until December 2030. So, for these customers, it’s a good time to understand how these two accounts differ and which one could be best for your first home savings.

The answer to the Lifetime ISA v Help to Buy ISA conundrum always depends on your individual circumstances, but here’s a quick run-through of the main points to consider.


Lifetime ISA explained:

Introduced in 2017, the Lifetime ISA is designed to encourage people to save for their first home (up to £450,000) or for retirement and offers a government bonus of 25% on top of the tax-free savings.


  • Bigger bonus! If you contributed the maximum amount every year (ages 18-49) you could receive £32,000 in bonuses from the government. 
  • Can be used either to buy a first home, or for savings for later life (retirement savings pot).
  • Save more each year (up to £4,000).
  • Buy a bigger property! You can use the Lifetime ISA to buy a property up to £450,000 everywhere in the UK. 
  • Bonus is paid monthly (so you’ll earn interest on your bonuses as well as your own money).


  • You can only open if aged 18-39.
  • 25% penalty for early withdrawals. If you withdraw within one year of opening, or for reasons other than buying a first home or retirement, you will pay a government charge of 25% on the amount you withdraw. The net effect of the government bonus, then 25% penalty is that you lose £6.25 per £100 you pay in (excluding investment gains/losses and fees for a Stocks & Shares Lifetime ISA).

Help to Buy ISA explained:

The Help to Buy ISA (not to be confused with the Help to Buy Scheme) also offers the same 25% government bonus on savings, although other details do differ from the LISA. The Help to Buy ISA is no longer available to open as a new product, if you hold an existing HTB ISA you can continue to pay in and use this account until December 2030.


  • No additional withdrawal penalties.
  • Option to buy a house sooner (once saved £1,600) – it doesn’t have to be open for one year before you can use it.


  • Can only save up to £2,400 each year (£3,400 in year one).
  • Only one lump sum deposit allowed (in first month) and £200 max monthly thereafter. So if you can’t pay your max amount for a particular month, you’ve missed your opportunity- there’s no roll over! 
  • Much lower maximum bonus (£3,000)
  • Help to Buy will only be available to new savers until November 30. You can pay into the ISA until November 2029 and you can claim the 25% bonus until November 2030.


Lifetime ISA vs Help to Buy ISA, what should I choose?

If you’re very confident that you’re going to be a first time buyer, you’re aged 18-39 and don’t need the money for at least a year after opening, the Lifetime ISA will probably be your winner as it allows for a bigger bonus. You also have the option to keep the account open and continue to use it to save (as well as earn the bonus) as a retirement pot. You can save in it until the day before your 50th birthday, and withdraw the cash and bonus when you turn 60. It is important to understand the withdrawal penalty that applies if you withdraw funds from your Lifetime ISA other than for your first home purchase or retirement. 


Can I have a Lifetime ISA and a Help to Buy ISA?

You can have a Help to Buy ISA and a Lifetime ISA at the same time, but you can only use the bonus from one of them towards buying a home.

You can transfer a Help to Buy ISA into a Lifetime ISA, but the amount you transfer will count towards your yearly £4,000 limit – for example, if you transfer £3,000, you can only save another £1,000 in that year.


Getting a foot on the property ladder can seem like a pipe dream, but with the help of these products, your dream home could be closer than you think. 🏠🔑

If you think the Lifetime ISA is right for you, check out the market-leading Moneybox Cash Lifetime ISA or the Moneybox Stocks & Shares Lifetime ISA.