Help to Buy ISA vs Lifetime ISA: which is better for you

Help to Buy ISAs and Lifetime ISAs both offer a 25% government boost for first-time buyers, but they work in different ways. Based on the facts above, the main differences are who can open them, how much you can pay in, the property price limits and what happens if you take money out. If you have both, you can only use the government bonus from one of them for your first-home purchase.

The two schemes side by side

The Help to Buy ISA is closed to new accounts, but existing savers can still pay in up to £200 a month, keep paying in until November 2029 and claim the bonus until November 2030. A Lifetime ISA can be opened if you are 18 or over but under 40, and you must make your first payment before 40. For a first-home purchase, both involve a solicitor or conveyancer in claiming or receiving the bonus.

How the bonuses compare

Both schemes offer a 25% government boost, but the limits differ. With a Lifetime ISA, you can put in up to £4,000 each year and get a bonus of up to £1,000 a year. With a Help to Buy ISA, existing savers can receive a 25% top-up up to £3,000. If you hold both accounts, you can only use the government bonus from one of them to buy your first home.

Limits and caps

A Lifetime ISA sits within the annual ISA limit, which is £20,000 for the 2026 to 2027 tax year, and you can pay up to £4,000 a year into it until you are 50. For a first-home purchase, the property must cost £450,000 or less, and you must buy at least 12 months after your first payment. The Help to Buy ISA has lower property caps: £250,000, or £450,000 in London.

Withdrawals and penalties

You can take money from a Lifetime ISA without charge if you are buying your first home, are aged 60 or over, or are terminally ill with less than 12 months to live. Other unauthorised withdrawals face a 25% charge, and that charge applies to the whole pot including the bonus. The GOV.UK Help to Buy ISA page states no equivalent withdrawal penalty.

Which one should you use

A Lifetime ISA looks broader for people who are still eligible to open one, because it allows up to £4,000 a year in contributions and can also be used later in life without charge from age 60. The Help to Buy ISA may only be relevant if you already have one, because it is closed to new accounts. Your choice may come down to eligibility, the property price cap and whether you want to avoid the Lifetime ISA withdrawal charge for non-qualifying withdrawals.

Key facts

Source: GOV.UK - Lifetime ISA — Guidance checked August 2026

Source: GOV.UK - Lifetime ISA — Guidance checked August 2026

Source: GOV.UK - Lifetime ISA — Guidance checked August 2026

Source: GOV.UK - Lifetime ISA — Guidance checked August 2026