Last updated: April 2026 · Sourced from official UK government publications
This is a plain-English definitions guide. All figures and rules are drawn from gov.uk/lifetime-isa and gov.uk/help-to-buy-isa. This is not financial advice, see the disclaimer below.
Both schemes give first-time buyers a 25% government bonus on their savings. But they work very differently, and the Help to Buy ISA is now closed to new applicants. Here’s a plain-English breakdown of how they compare, so you know exactly which one applies to you.
The LISA gives significantly more. The Help to Buy ISA has a lifetime bonus cap of £3,000, paid only at property completion. The LISA pays up to £1,000 per year directly into your account, with no lifetime cap. Someone saving for five years can collect £5,000 in LISA bonuses versus a maximum of £3,000 from the Help to Buy ISA.
| Lifetime ISA (LISA) | Help to Buy ISA | |
|---|---|---|
| Bonus rate | 25% on contributions | 25% on savings |
| Annual contribution limit | £4,000/year | £2,400/year (£200/month max) |
| Maximum annual bonus | £1,000/year ✓ Higher | No annual bonus limit, paid at completion |
| Lifetime bonus cap | Up to £33,000 (18–50) | £3,000 maximum (on £12,000 saved) |
| When bonus is paid | Monthly into your account | At property completion via your solicitor |
| Bonus counts toward deposit? | Yes, already in your account | No, paid only at completion, not exchange |
For most first-time buyers, the LISA offers considerably more bonus money over time. The Help to Buy ISA caps out at a £3,000 lifetime bonus; the LISA can deliver £1,000 every single year. Someone saving for five years could collect £5,000 in LISA bonuses vs £3,000 at most from a Help to Buy ISA, and the LISA bonus is already sitting in your account working for you.
The key difference is that the Help to Buy ISA closed to new applicants in November 2019, you cannot open one now. The LISA remains open to anyone aged 18 to 39. Both require first-time buyer status, but the LISA has a national property price limit of £450,000, compared to the Help to Buy ISA’s £250,000 limit outside London.
| Lifetime ISA (LISA) | Help to Buy ISA | |
|---|---|---|
| Open to new applicants? | Yes ✓ Still open | No, closed 30 Nov 2019 |
| Age to open | 18–39 only | 16+ (when open) |
| Age to contribute | Up to age 50 | Until Nov 2029 (existing accounts only) |
| First-time buyer required? | Yes | Yes |
| Property price limit (England) | £450,000 ✓ Higher | £250,000 (£450,000 in London) (limits at scheme closure, Nov 2019) |
| Can both partners use the scheme? | Yes, both can use separate LISAs | Yes, both could use separate accounts |
| Can you hold both? | Yes, but you can only use one government bonus per property purchase | |
The property price limit is a critical difference for most of England. Outside London, Help to Buy ISA was capped at £250,000, a limit that rules out most properties in many parts of the country today. The LISA’s £450,000 limit covers the vast majority of first-time buyer purchases.
If you already hold a Help to Buy ISA and are under 40, you can also open a LISA. However, you can only use one government bonus when you buy, you cannot stack both on the same purchase. The LISA offers a higher lifetime bonus and a higher property price limit; the Help to Buy ISA offers more flexibility on early withdrawal. Which suits your circumstances will depend on your individual situation, consider speaking to an independent financial adviser if unsure.
The LISA has a strict 25% early withdrawal penalty applied to the full balance, meaning you can get back less than you put in if you withdraw for an ineligible reason. The Help to Buy ISA has no penalty: you can withdraw your savings at any time; you simply forfeit the government bonus. This makes the Help to Buy ISA more flexible, but the LISA more powerful for eligible buyers.
| Lifetime ISA (LISA) | Help to Buy ISA | |
|---|---|---|
| How to use for property | Conveyancer requests funds directly from LISA provider | Solicitor applies for bonus via government portal at completion |
| 12-month holding rule | Yes, must hold 12 months before use | No minimum holding period |
| Early withdrawal penalty | 25% on total balance (can lose more than you saved) | None, withdraw savings anytime, just don’t get the bonus |
| Non-property withdrawals | Only penalty-free at age 60+ or terminal illness | Anytime, just lose the bonus entitlement |
| Flexibility ✓ HTB wins here | Low, money is locked in | High, withdraw savings at any time |
The LISA’s withdrawal penalty is its biggest downside. If your plans change, you inherit a property, you buy above the £450,000 limit, or you simply need the money, withdrawing early costs you 25% of the total balance. On a £20,000 LISA pot, that’s a £5,000 penalty, leaving you with £15,000 from £16,000 of your own money.
The Help to Buy ISA has no such penalty. You can withdraw your savings at any time; you simply don’t claim the government bonus. This flexibility made it more forgiving, but the lower property limit and smaller bonus made it less powerful for most buyers.
The bottom line: if you are under 40 and certain you are buying a first home under £450,000, open a LISA as soon as possible to start the 12-month clock. If you already have a Help to Buy ISA, check your property’s price against both limits before deciding which bonus to claim at completion.
Both pay a 25% government bonus to first-time buyers, but the amounts and mechanics differ significantly. The LISA allows up to £4,000 per year with up to £1,000 bonus paid monthly into your account. The Help to Buy ISA was capped at £200 per month with a maximum lifetime bonus of £3,000, which was only paid at property completion, not at exchange of contracts.
No. The Help to Buy ISA closed to new applicants on 30 November 2019. If you do not already hold one, it is no longer possible to open one. Existing account holders can continue contributing until November 2029 and must use the bonus for a qualifying property purchase by November 2030.
The LISA delivers considerably more over time for most savers. The Help to Buy ISA had a lifetime bonus cap of £3,000. The LISA pays up to £1,000 per year and has no overall lifetime cap, someone contributing the maximum from age 18 to 50 could receive up to £33,000 in government bonuses. Even over five years, the LISA can pay £5,000 in bonuses versus £3,000 at most from the Help to Buy ISA.
Yes, this is a permitted one-time transfer. The transferred amount does not count against your £4,000 annual LISA contribution limit in the year of transfer. However, transferring means giving up any entitlement to the Help to Buy bonus, it will no longer be available at property completion. The LISA bonus applies only to contributions made after the transfer takes effect.
Yes. The LISA can be used on properties priced up to £450,000, and this limit applies nationally. The Help to Buy ISA had a limit of £250,000 outside London and £450,000 within Greater London (at the time the scheme closed in 2019). The LISA's national £450,000 limit covers a significantly wider range of first-time buyer properties across England, Scotland, Wales, and Northern Ireland.
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Subscribe free →Not financial advice. This guide compares the LISA and Help to Buy ISA based on HMRC rules as of April 2026. It is for information only and does not constitute personal financial advice. Individual circumstances vary, consider speaking to an independent financial adviser before making any savings decision. Always check gov.uk/lifetime-isa and gov.uk/help-to-buy-isa for the latest rules.