Why choose a Lifetime ISA?
If you’re saving to buy your first home or retirement, investing in a Lifetime ISA could help you reach your goals.
Thinking about transferring a Help to Buy ISA? You can contribute more to a Lifetime ISA than a Help to Buy ISA, meaning you could get a larger government bonus. Lifetime ISAs also offer more options for how and when you use the money.
This video explains how Lifetime ISAs work, including the government bonus and your options for taking money out.
Compare Lifetime and Help to Buy ISAs
If you're saving to buy your first home, there are two different ISAs that could help - so which is better?
| Lifetime ISA | Help to Buy ISA | ||
|---|---|---|---|
| Who can open one? | 18-39 year olds | Closed to new applicants | |
| Can I put in one-off amounts? | Yes | No – monthly payments only (max of £200/ month), with an extra £1,000 in the first month | |
| How much is the government bonus? | 25% | 25% | |
| What is the maximum government bonus? | Up to £1,000 each tax year until you turn 50 | Up to £3,000 in total | |
| When is the government bonus added? | Monthly | On completion of buying your first home | |
| Can I earn interest on, or invest the government bonus? | Yes – you can invest or earn interest on the government bonus as soon as it’s paid into your Lifetime ISA | No – the bonus is paid to your conveyancer when you buy your first home | |
| When can I use the money to buy a house? | Anytime after you’ve had your Lifetime ISA for a year, otherwise there’s a 25% charge, so you could get back less than you put in. | After you’ve saved £1,600 | |
| What’s the maximum house price allowed? | £450,000 | £250,000 (£450,000 in London) | |
| Can I use the money for anything besides buying my first home? | You can take your money out tax free after you turn 60. Earlier withdrawals (which aren’t for an eligible house purchase) usually incur a 25% government charge, so you could get back less than you put in | You can take your money out at any time but won’t receive the government bonus on the money you withdraw. | |
| Can I use the account to invest in the stock market? | Yes – you can hold cash or invest | No – you can only hold cash in a Help to Buy ISA | |
| How much can I put in each tax year? | Up to £4,000 until you turn 50 | Up to £2,400 (£3,400 in the first year) |
Transferring to a Lifetime ISA
Whether you're transferring from a Help to Buy ISA, or another type of ISA, here's what you need to know before you get started.
Transferring ISAs to a Lifetime ISA
You can transfer up to £4,000 from another (non-lifetime) ISA to an HL Lifetime ISA each tax year. You’ll get the 25% government bonus on the amount you transfer, up to £1,000. Unfortunately, we can’t currently accept transfers from other Lifetime ISAs.
If you want to use the Lifetime ISA to buy a home, just remember that if you do that in the first year of having your Lifetime ISA, you will have to pay the 25% government withdrawal charge.
Your ISA allowance
Transferring counts towards your Lifetime ISA allowance, but not your overall ISA allowance. You can transfer ISAs from the current tax year or previous ones, but only up to the £4,000 allowance.
What happens to your investments
Your ISA will be transferred as cash. This means you’ll be out of the market during the transfer. Your money will be stable if the market falls, but if it rises you won't benefit.
Once the money is in your Lifetime ISA, you can choose how you'd like to invest.
Transfer to the HL Lifetime ISA
You can transfer up to £4,000 from existing (non-lifetime) ISAs, including Help to Buy ISAs, to an HL Lifetime ISA. Unfortunately, we can’t currently accept transfers from other Lifetime ISAs.
If you decide to invest after you transfer, just remember that investments aren't as secure as cash. They can go down as well as up in value so you could get back less than you put in.
Once you've decided you'd like to transfer to a Lifetime ISA, it takes just a few minutes to get started online.
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Help and support
If you have any questions about the HL Lifetime ISA, you can speak to one of our UK-based client support experts.