What is a Lifetime ISA?

A Lifetime ISA (LISA) is a type of tax-efficient savings account designed to help you save for your first home or retirement.

You can contribute up to £4,000 each tax year and receive a 25% government bonus on your savings, subject to LISA rules.

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.

How much can you save in a Lifetime ISA?

Who can open a Lifetime ISA?

How do you withdraw money from a Lifetime ISA?

Buying your first home with a Lifetime ISA?

What happens when you turn 60?

How much can you save in a Lifetime ISA?

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.

How to open a Lifetime ISA

To open a Lifetime ISA, you need to be:

Aged 18 to 39
Usually be a UK resident, subject to certain exceptions

You must make your first payment before you turn 40. You can then continue contributing up to the age of 50. Once you turn 50, you can’t pay in any more or earn the 25% government bonus. However, your savings will still earn interest or investment returns.

You can contribute up to £4,000 each tax year, with the government adding a 25% bonus to your contributions, up to £1,000 a year.

How do you withdraw money from a Lifetime ISA?

You can withdraw money free of charge from a Lifetime ISA if you’re:

Buying your first home (conditions apply)
Aged 60 or over
Terminally ill with less than 12 months to live

If you withdraw money for another reason, a 25% withdrawal charge will usually apply. This means you could receive back less that you originally paid into the LISA.

The 25% charge is paid to HMRC by the Lifetime ISA provider on the account holder’s behalf.

When can you withdraw from a Lifetime ISA
Why you're withdrawing	Withdrawal charge	Key conditions
Buying your first home. Use your savings and the government bonus towards your first home.	No charge	Property must cost £450,000 or less You must have had your Lifetime ISA for at least 12 months Purchase must be made through a mortgage with an eligible conveyancer or solicitor
Aged 60 or over You can withdraw your savings from age 60.	No charge	Available from age 60
Terminally ill If you're terminally ill with less than 12 months to live.	No charge	You must have less than 12 months to live
Any other reason For example, you change your mind or want the money for something else.	25% charge applies	A 25% withdrawal charge will usually apply, meaning you could receive back less than you paid in

When can you withdraw from a Lifetime ISA
Why you're withdrawing	Buying your first home. Use your savings and the government bonus towards your first home.	Buying your first home. Use your savings and the government bonus towards your first home.
Withdrawal charge	No charge	No charge
Key conditions	Property must cost £450,000 or less You must have had your Lifetime ISA for at least 12 months Purchase must be made through a mortgage with an eligible conveyancer or solicitor	Property must cost £450,000 or less You must have had your Lifetime ISA for at least 12 months Purchase must be made through a mortgage with an eligible conveyancer or solicitor

Why you're withdrawing	Aged 60 or over You can withdraw your savings from age 60.	Aged 60 or over You can withdraw your savings from age 60.
Withdrawal charge	No charge	No charge
Key conditions	Available from age 60	Available from age 60

Why you're withdrawing	Terminally ill If you're terminally ill with less than 12 months to live.	Terminally ill If you're terminally ill with less than 12 months to live.
Withdrawal charge	No charge	No charge
Key conditions	You must have less than 12 months to live	You must have less than 12 months to live

Why you're withdrawing	Any other reason For example, you change your mind or want the money for something else.	Any other reason For example, you change your mind or want the money for something else.
Withdrawal charge	25% charge applies	25% charge applies
Key conditions	A 25% withdrawal charge will usually apply, meaning you could receive back less than you paid in	A 25% withdrawal charge will usually apply, meaning you could receive back less than you paid in

Buying your first home with a Lifetime ISA?

You can use your Lifetime ISA savings to help you buy your first home if all the following apply:

The property is in the UK and costs £450,000 or less
You must have money in your lifetime ISA for at least 12 months before you buy the property
A conveyancer or solicitor must act on your behalf (the ISA provider will pay the funds directly to them)
- You must be a first-time buyer
You must buy the property with a mortgage
You aren’t related to the person providing the mortgage (this includes close relatives, in-laws, a spouse or civil partner, and their relatives)

Can you buy your first home with someone else?

Yes. You can buy your first home with someone else and use your Lifetime ISA savings towards the purchase. If the person you’re buying with also has a LISA, you can both use your savings and government bonuses, provided you both meet the relevant first-time buyer conditions.

Can you use a Lifetime ISA with a Help to Buy ISA?

If you have both a Help to Buy ISA and a Lifetime ISA, you can transfer money from a Help to Buy ISA into a Lifetime ISA. However, you can only use the government bonus from one of these ISAs towards your first home.

For more information, visit GOV.UK: Lifetime ISA

What happens when you turn 60?

Once you reach 60, you can withdraw money from your Lifetime ISA without the 25% withdrawal charge.

You can take some or all of your savings, depending on your circumstances. Any money you choose to keep in your LISA can continue to earn tax-free interest, income or capital gains.

A Lifetime ISA can be one way to save towards your retirement goals, alongside other options such as pensions and other savings accounts.

Read our guides on pensions and retirement planning.