How much is the Lifetime ISA bonus?

25% of what you pay in, on up to £4,000 a year. That's a maximum bonus of £1,000 a year, added by the government.

I'm buying in six months. Should I open one now?

It won't help this purchase, because the account must be open 12 months before you buy to use it. It's still worth opening for the future, but you can't rely on it for a near-term purchase.

What happens if I take the money out for something else?

You pay a 25% withdrawal charge, which is more than the bonus you received, so you'd come out behind. Only save what you're committed to using for your first home.

Is a Lifetime ISA worth it for your first home?

A 25% top-up from the government sounds too good to ignore, and mostly it is. But there are a few rules that can turn free money into a penalty if you're not paying attention.

Reviewed 8 June 2026 · Information, not advice.

The free money bit

You can pay up to £4,000 a year into a Lifetime ISA, and the government adds 25% on top. Max it out and that's a £1,000 bonus a year, every year, just for saving toward your first home. Over a few years it genuinely adds up.

Two of you buying together? You can each have one, so you can each collect the bonus. That's worth knowing, because it doubles the benefit.

The rules that bite

First, timing: the account has to be open at least 12 months before you buy. Open it the week you start house-hunting and the bonus won't be there when you need it. If you do nothing else after reading this, open one with a pound in it just to start the clock.

Second, the price cap: it only works on homes up to £450,000. Buy above that and you can't use the LISA for it without a penalty.

Third, the penalty itself: take the money out for anything other than your first home (or retirement) and you lose 25%, which is actually more than the bonus you got. So only put in what you're genuinely saving for the house.

Run your own numbers

How long until I can buy?How much deposit do I need?

Common questions

How much is the Lifetime ISA bonus?: 25% of what you pay in, on up to £4,000 a year. That's a maximum bonus of £1,000 a year, added by the government.
I'm buying in six months. Should I open one now?: It won't help this purchase, because the account must be open 12 months before you buy to use it. It's still worth opening for the future, but you can't rely on it for a near-term purchase.
What happens if I take the money out for something else?: You pay a 25% withdrawal charge, which is more than the bonus you received, so you'd come out behind. Only save what you're committed to using for your first home.