Lifetime ISAs (also known as LISAs) are a type of ISA created to help people save either for their first home or for retirement. If you take out a Lifetime ISA, the government will give you a bonus worth 25% of what you pay in, up to a set limit, every tax year. Find out whether taking out a Lifetime ISA is the best option for you.

  • You can put a maximum of £4,000 into a Lifetime ISA each tax year.
  • You’re paid a 25% bonus from the government. The bonus will be paid monthly.
  • The maximum bonus you can earn in a tax year is £1,000.
  • The amount you pay in is linked to your annual ISA allowance (£20,000 for 2021/22). For example, if you pay £1,000 into your Lifetime ISA, you can still pay £19,000 into other ISA products.
  • You can open a Lifetime ISA, a Cash ISA, a Stocks and Shares ISA and an Innovative Finance ISA in each tax year.


If you put £1,000 into your Lifetime ISA, the government will add an extra £250. This would leave you with £1,250 at the end of the tax year.

If you deposit £200 into your Lifetime ISA, the government will add an extra £50. This would leave you with £250 at the end of the tax year.

How is my bonus paid?

HMRC now calculates bonus payments on a month-by-month basis. Any bonus is calculated based on payments you make into your account from the 6th of the month to the 5th of the following month.

But it’s a good idea to check with your provider as some might treat bonus payments differently. Some will automatically reinvest bonus payments, taking advantage of any potential growth and increase in value. While others might put your money into non-interest earning cash accounts. This means you might miss out on interest or future potential growth of your invested fund.

Who can get a Lifetime ISA?

You can open a Lifetime ISA with any bank, building society or investment manager that offers the product.

To open a Lifetime ISA, you need to be:

  • between the age of 18 and 40
  • a UK resident or a Crown servant (for example, a member of the armed forces serving abroad).

You can continue paying into a Lifetime ISA until you’re 50.

Using a Lifetime ISA to buy your first home

If you want to use a Lifetime ISA to buy a home, there are a few restrictions you need to keep in mind:

  • Only first-time buyers can use Lifetime ISAs to buy a home. That means you can’t own, or have owned, a home in the UK or anywhere in the world.
  • You’ll need to be buying a home for no more than £450,000.
  • You must be buying a home you plan to live in. The scheme isn’t for buying a home you want to rent out, or a holiday home.
  • You must use a traditional repayment mortgage.

If you are thinking about stepping onto the property ladder talk to Asset Harbour about your options