The Lifetime ISA (LISA) helps you save for your first home or retirement with a generous government bonus. You can get up to £1,000 per year free just for saving or investing — but there are strict rules on when and how you can access the money.

New to ISAs? Start with our intro to ISAs to understand the basics first.

How the Lifetime ISA Works

• Available to UK residents aged 18–39
• You can save up to £4,000 per year
• The government adds a 25% bonus (up to £1,000 per year)
• You can contribute until age 50

You can open either a Cash LISA or a Stocks & Shares LISA, depending on your risk appetite.

Using Your LISA

You can withdraw your money without penalty if:

• You’re buying your first home (up to £450,000)
• You’re aged 60 or over (retirement)
• You’re terminally ill

For anything else, you’ll pay a 25% withdrawal charge — which actually takes more than just the bonus. For example, withdrawing £1,000 (with a £250 bonus) results in a £250 penalty, leaving you with only £750.

Buying Your First Home with a LISA

• The property must cost less than £450,000
• You must use a solicitor or conveyancer
• The LISA must have been open for at least 12 months
• It must be your first home

Both you and your partner can use a LISA if you’re both first-time buyers.

Can You Use a LISA for Retirement?

Yes — if you don’t use it for a home, you can still keep saving and withdraw from age 60. It works well alongside a pension, though it doesn’t benefit from employer contributions.

Should You Open a Lifetime ISA?

A LISA could be a smart choice if:

• You’re saving for a first home within the next 5–10 years
• You’re self-employed and want a flexible retirement savings option
• You’re under 40 and want to maximise tax-free savings with a bonus

But if you might need the money for something else, the penalty could make other ISA types more suitable.

More ISA Guides

• What Is an ISA?
• Cash ISA
• Stocks & Shares ISA
• Innovative Finance ISA
• Junior ISA