The lifetime ISA – also known as LISA – is a new type of ISA designed to help people aged between 18 and 40 save for their first home, or retirement.

How do they work?

A LISA lets you save up to £4,000 per year. At the end of the tax year the Government will top up your ISA with a 25% bonus. You will be able to earn a 25% bonus on your LISA contributions up until the age of 50. Any money you put into your LISA will be included as part of your annual ISA contribution limit. Tax-free funds, including the government bonus, can then be used to help buy a first home worth up to £450,000 at any time from 12 months after first saving into the account.

Funds, including the government bonus, can be withdrawn from the LISA from age 60 tax-free for any purpose. LISA holders can also access their savings if they become terminally ill. Withdrawals at any time for other purposes can be made but a 25% government withdrawal charge will be applied. The government will provide a bonus of 25% on all contributions to a LISA within the limits. The bonus will be paid only on the amount paid in, and not on any interest or investment growth.

This means that if you invest £4,000 in a year, but after investment the pot increases or decreases before the claim is made, you will still receive a bonus of £1,000. The relevant ISA manager will claim the bonus from HMRC and pay this into your LISA. Managers will not be required to hold government bonus payments separate from other LISA funds or invest them differently.

There will be no statutory minimum size of bonus that a provider can claim. ISA managers will submit any claims for 2017/18 to HMRC after the end of that tax year. From 2018/19 the bonus will be claimed and paid on a monthly basis. Where contributions that have not yet received a bonus are withdrawn, the ISA manager will still be able to claim a bonus on the contributions in the same way as if the funds had not been withdrawn.


To be eligible to invest in a LISA, you must be aged 18 or over but under 40 at the time the LISA is opened.

You must also be either:

  • resident in the UK;
  • a Crown Servant (for example a diplomat or civil servant); or
  • the spouse or civil partner of a Crown Servant.

Lifetime ISAs can hold cash, stocks and shares qualifying investments, or a combination of both.You can save up to £4,000 per tax year, and can continue to pay into it until you reach 50. The account can stay open after then, but you can’t make any more payments into it.

Your savings will be kept on a tax-free basis for as long as you keep the money in your LISA. If you cease to be eligible to invest in a LISA, any existing ISAs will continue to be exempt from UK tax, but future contributions to regular investment ISAs must be terminated and no further single contributions may be made. You will be able to contribute to one LISA in each tax year, as well as a cash ISA, a stocks and shares ISA, and an Innovative Finance ISA, within the overall ISA limit of £20,000.

Contribution limits

The current LISA maximum contribution limit is £4,000, and the overall maximum contributions to ISAs is £20,000.


Any investment returns received will be tax free. There is no personal tax on any income taken and no capital gains tax on any gains made.

The value of your LISA and other ISAs will be included in your estate for Inheritance Tax purposes on your death (except ISAs invested in shares listed on alternative investment markets that may qualify for Business Property Relief).

Download our LISA fact sheet for more details.


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