As with other ISAs, you won't pay tax on any interest, income, or capital gains from cash or investments held within a Lifetime ISA.
HSBC doesn’t currently offer Lifetime ISAs, but you can learn more about them in this guide.
The maximum amount you can contribute to a LISA each tax year is £4,000.
The government will add a 25% bonus. The maximum bonus you can earn in a tax year is £1,000.
To open a Lifetime ISA, you need to be:
You must make your first payment into your Lifetime ISA before you’re 40 but you can continue to save into this until the age of 50.
When you turn 50, you won’t be able to pay into your Lifetime ISA anymore or earn the 25% government bonus. However, your savings will still be able to earn interest or investment returns.
You can withdraw money free of charge from a Lifetime ISA if you’re:
Other withdrawals will usually mean a 25% government charge, so you could get back less than you put in. In certain circumstances, such as terminal illness (with less than 12 months to live) or upon death, there’s no charge to withdraw the funds or assets from your account.
The 25% charge is paid to HMRC by the Lifetime ISA provider on the account holder’s behalf.
You can use your Lifetime ISA savings to help you buy your first home if all the following apply:
You can’t be related to the person who's providing your mortgage. This includes close relatives, in-laws, a spouse or civil partner, and their relatives.
If the person you’re buying with has a Lifetime ISA, you can both use your savings and government bonus, as long as you’re both first-time buyers and meet the conditions above.
If you have a Help to Buy ISA, you can transfer money from a Help to Buy ISA to a Lifetime ISA, but you can only use the government bonus from one of them to buy your first home.
For more information, visit GOV.UK: Lifetime ISA
After your 60th birthday, you have access to all the money in your Lifetime ISA, without the 25% charge. Any money you choose to keep in your LISA after 60 will keep earning tax-free interest, income, or capital gains.
A Lifetime ISA is one of many ways that could help you reach your retirement goals.
Read our guides on pensions and retirement planning.
Tax rules can change, and the value of any tax benefits will depend on your circumstances.
Tax-free means free of liability to UK income tax or capital gains tax.
This article was last updated:13/03/2025, 09:37
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