If you're saving for your first home, two government-backed accounts offer generous bonuses to turbocharge your deposit savings: the Lifetime ISA (LISA) and the Help to Buy ISA. The Help to Buy ISA closed to new applicants in 2019, but millions of savers still hold one. Understanding the differences could mean thousands of extra pounds towards your deposit.
Help to Buy ISA: What You Need to Know in 2026
The Help to Buy ISA closed to new applicants in November 2019, so you can't open one now. However, if you already have one, you can continue saving until November 2029 and claim your bonus until November 2030. The bonus is 25% on savings up to £12,000 — meaning a maximum bonus of £3,000. Crucially, the bonus is only paid on completion of your property purchase, not exchange, which has caught some buyers out.
- Maximum savings: £12,000 (£200/month, plus £1,200 initial deposit)
- Government bonus: 25% on savings, maximum £3,000
- Property price limit: £250,000 (£450,000 in London)
- Bonus paid at completion — not available for exchange deposit
- Deadline to claim bonus: November 2030
Lifetime ISA: The Current Option in 2026
The Lifetime ISA is available to anyone aged 18–39 and offers a 25% government bonus on up to £4,000 saved per tax year. This means you can earn up to £1,000 in free government money annually, and up to £33,000 in total lifetime bonuses if you open at 18 and save consistently until 50. For first-time buyers, the LISA can be used on properties up to £450,000 — a significant advantage over the Help to Buy ISA limit outside London.
- Annual contribution limit: £4,000
- Government bonus: 25% (up to £1,000/year)
- Property price limit: £450,000 (nationwide)
- Must be used on first property OR held until age 60 for retirement
- Withdrawal penalty outside these uses: 25% charge (you lose bonus plus 6.25% of your own money)
LISA vs Help to Buy ISA: Head-to-Head Comparison
For most first-time buyers in 2026, the Lifetime ISA is the clear winner — you can save more, earn more bonus, and the property price limit is higher. The maximum LISA bonus over 5 years of saving is £5,000. The maximum Help to Buy ISA bonus is £3,000 total. However, if you already have a Help to Buy ISA with significant savings, it may still be worth continuing alongside opening a LISA.
- LISA: up to £1,000 bonus per year vs Help to Buy ISA's £200/year maximum
- LISA: £450,000 property limit nationwide vs HTB ISA £250,000/£450,000 (London)
- LISA: bonus available for exchange deposit vs HTB ISA only at completion
- Both: only for first-time buyers
- Both: 25% government bonus rate
Can You Have Both a LISA and a Help to Buy ISA?
Yes, you can hold both accounts simultaneously. However, you can only use the government bonus from ONE of them towards your first home purchase. Most financial advisers recommend using the LISA bonus as it's typically worth more. You could continue contributing to both accounts but only claim the LISA bonus at purchase. The HTB ISA savings can still be used as part of your deposit — just not the bonus.
Can I transfer my Help to Buy ISA into a Lifetime ISA?
Yes, but the transferred amount counts towards your £4,000 annual LISA allowance. A transfer of £4,000 from your HTB ISA uses your entire LISA allowance for that tax year.
What happens to my Help to Buy ISA if I don't use it for a house?
You can withdraw your savings and any interest earned, but you forfeit the government bonus. There's no penalty beyond losing the bonus — unlike the LISA which charges 25%.
Is there a minimum savings period before I can use a LISA?
Yes. Your Lifetime ISA must be open for at least 12 months before you can use it to purchase a property.
Which Should You Choose in 2026?
If you don't already have a Help to Buy ISA and are under 40, open a Lifetime ISA immediately. The higher contribution limit and annual bonus make it significantly more powerful. If you have an existing Help to Buy ISA, continue it and also open a LISA if you qualify — you'll benefit from both sets of savings when you buy. Remember: the LISA property price limit of £450,000 means it works in most UK cities, though buyers in prime London locations may still need to exceed this.
- New saver under 40: open a Lifetime ISA
- Existing HTB ISA holder: keep it AND open a LISA
- Buying above £450,000: neither account's bonus will apply — consider stocks and shares ISA instead
- Check best LISA rates at /blog/cash-isa-vs-stocks-and-shares-isa-2026
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