Is a Lifetime ISA better than Help to Buy ISA?

Yes, for most people. LISA: 25% bonus on up to £4,000/year (max £1,000 bonus). HTB ISA: 25% on up to £200/month (max £3,000 lifetime bonus). LISA has higher potential bonus and can be used for retirement if you don't buy. HTB ISA closed to new accounts.

Can I have both a Lifetime ISA and Help to Buy ISA?

You could hold both, but can only use ONE bonus for a property purchase. If you have both, choose which bonus to claim (usually LISA is higher). The other becomes a regular ISA. Help to Buy ISA now closed to new applications.

What happened to Help to Buy ISA?

Closed to new accounts November 2019. Existing accounts could deposit until November 2029 and claim bonus until November 2030. No new accounts available. Lifetime ISA is the replacement for first-time buyer saving.

Can I transfer Help to Buy ISA to Lifetime ISA?

Yes, you can transfer your HTB ISA balance to a LISA. It counts toward your annual LISA limit (£4,000). The transfer itself doesn't count as a withdrawal from the HTB ISA, so no bonus is lost.

Lifetime ISA vs Help to Buy ISA — Which Is Better? | PocketWise

Both accounts offer bonuses for first-time buyers, but they work differently.

Read more: See our Isas guide for a complete overview of this topic.

Quick Comparison

Feature	Lifetime ISA	Help to Buy ISA
Status	Open	Closed to new accounts
Government bonus	25%	25%
Annual limit	£4,000	£2,400 (£200/month)
Max bonus per year	£1,000	£600
Lifetime max bonus	Unlimited (to age 50)	£3,000
Property price limit	£450,000	£250,000 (£450k London)
Can use for retirement	Yes	No
Age limit	18-39 to open	Was 16+

Help to Buy ISA — Key Facts

Current Status

Status	Details
New accounts	Closed (November 2019)
Existing accounts	Can still deposit
Final deposits	November 2029
Final bonus claims	November 2030

If You Have One

Feature	Details
Keep depositing	Up to £200/month
Bonus earned	25% of balance
Maximum bonus	£3,000 (on £12,000)
Property limit	£250,000 (£450,000 London)
When paid	At completion (not exchange)

HTB ISA Limitations

Issue	Impact
Lower monthly limit	Only £200/month
Lower total bonus	Capped at £3,000
Property price cap	Restrictive in many areas
Bonus timing	Paid at completion, not exchange
Can’t use for retirement	Only for property or withdraw

Lifetime ISA — Key Facts

How It Works

Feature	Details
Contribute up to	£4,000/year
Government adds	25% (up to £1,000/year)
For	First home OR retirement
Age to open	18-39
Age to use for property	Until 60 (after that it’s only for retirement)
Property limit	£450,000

LISA Advantages

Advantage	Details
Higher annual limit	£4,000 vs £2,400
Higher annual bonus	£1,000 vs £600
No lifetime cap	Keep saving until 50
Retirement backup	Use at 60 if don’t buy
Higher property cap	£450,000 everywhere
Bonus timing	Before buying (during savings)

LISA Withdrawal Penalty

If Withdraw Early	Penalty
Not for property or retirement	25% penalty on withdrawal
Effect	Lose bonus plus some of your own money
Example	Put in £4,000 + £1,000 bonus = £5,000. Early withdraw: lose £1,250. Get back £3,750.

Detailed Comparison

Contribution Limits

Timeframe	Lifetime ISA	Help to Buy ISA
Year 1 max	£4,000	£3,400 (£1,200 first month + £200 x 11)
Year 2+ max	£4,000	£2,400
Over 5 years	£20,000	£12,800
Over 10 years	£40,000	£25,200

Bonus Earned

Savings	LISA Bonus	HTB ISA Bonus
After 1 year (max)	£1,000	£850
After 5 years (max)	£5,000	£3,000 (capped)
After 10 years (max)	£10,000	£3,000 (capped)

Property Price Limits

Location	LISA	HTB ISA
Anywhere in UK	£450,000	£250,000
London only	£450,000	£450,000

Which Should You Use?

Use Lifetime ISA If

Situation	Why LISA
Don’t have HTB ISA	Only option now
Can save £200+/month	Maximise the bonus
Buying above £250k	HTB ISA won’t work
Want retirement backup	Flexibility if don’t buy
Have years to save	More time = more bonus

Keep HTB ISA If

Situation	Why Keep
Already maxed out	Have £12,000 saved
Buying very soon	No time to build LISA
Risk-averse about penalty	HTB ISA has no penalty
Under 18	Can’t open LISA yet

Have Both?

Key Rule	Details
Can hold both	Yes
Can use both bonuses	NO — only one per property
Strategy	Use whichever has higher bonus at purchase time
Other account	Becomes regular ISA

Transferring HTB ISA to LISA

How to Transfer

Step	Details
Open LISA	If under 40
Request transfer	To LISA provider
Counts toward limit	£4,000 annual cap
No bonus on transfer	LISA bonus applied after

Example

Situation	Details
HTB ISA balance	£5,000
Transfer to LISA	Counts as £4,000 this year + £1,000 next year
Or	Transfer £4,000, keep £1,000 in HTB ISA
Then	LISA earns 25% bonus going forward

If You Don’t Buy a Property

Lifetime ISA

Option	Details
Keep until 60	Use for retirement
Withdraw early	25% penalty
Terminal illness	Can withdraw penalty-free
Death	Passes to estate

Help to Buy ISA

Option	Details
Withdraw	Get your savings, not bonus
No penalty	Just lose the potential bonus
Becomes	Normal cash savings

Summary: Quick Decision

You Should Open a LISA If

Criteria	Check
Aged 18-39	☐
First-time buyer	☐
Property under £450,000	☐
Can leave money 12+ months	☐
Okay with penalty risk	☐

Stick with HTB ISA If

Criteria	Check
Already have one with good balance	☐
Buying very soon	☐
Under 18	☐
Want zero risk of penalty	☐

Can’t Open Either If

Situation	Why
Already own/owned property	Not first-time buyer
Over 40	Can’t open new LISA
Don’t have HTB ISA	Can’t open new one

Key Numbers

Feature	LISA	HTB ISA
Max annual bonus	£1,000	£600
Max lifetime bonus	No cap	£3,000
Property price cap	£450,000	£250,000

The Lifetime ISA is the better choice for most first-time buyers saving for a deposit. The higher contribution limits and uncapped lifetime bonus make it more generous. Only keep a Help to Buy ISA if you already have significant savings in one and are buying very soon.

Lifetime ISA vs Help to Buy ISA — Which Is Better?

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