🏠
Lifetime ISA
Government bonus25% free money from the government — for your first home or retirement.
Annual limit
£4,000
Counts towards your £20,000 ISA allowance
Government incentive
25% government bonus (up to £1,000/year)
Tax on growth
None
Tax on income
None
Tax on withdrawal
Tax-free for first home or retirement (age 60+). 25% penalty otherwise.
Eligibility
UK residents aged 18–39 to open; contribute until age 50
Best for
- ✓First-time buyers saving for a deposit
- ✓Under-40s supplementing pension savings
Key benefits
- ✓Government adds 25p for every £1 you contribute — free money
- ✓Up to £1,000/year in government bonuses
- ✓Bonus and growth are both tax-free
- ✓Can hold stocks & shares or cash
Restrictions & watch-outs
- ⚠️Must be 18–39 to open; contributions stop at age 50
- ⚠️25% withdrawal penalty if used for anything other than a first home or retirement — this claws back the bonus AND ~6.25% of your own money
- ⚠️First-home property must cost ≤ £450,000
- ⚠️Must hold the account for at least 12 months before using for a home purchase
- ⚠️Only £4,000/year (vs £20,000 for a plain ISA)
See the numbers
Use our calculator to model exactly how this account could work for you.