Help to Buy ISA vs Lifetime ISA: Which Wins in 2026?
Both ISAs offer the same headline prize, a 25% government bonus for first-time buyers, but only one is still open, and the other wins on flexibility. If you hold one, are choosing one, or are wondering whether to switch, the answer depends on your age, timeline, and certainty about buying.
Key takeaways
- Help to Buy ISAs closed to new savers on 30 November 2019; holders can pay in until 2029 and claim the bonus until 2030.
- Lifetime ISAs are open aged 18 to 39, allow £4,000 a year, and add a 25% bonus up to £1,000 a year.
- The Help to Buy ISA bonus caps at £3,000 total; the Lifetime ISA bonus has no lifetime cap.
- Lifetime ISA withdrawals outside a first home, age 60, or terminal illness face a 25% charge.
- Starting fresh in 2026, the Lifetime ISA wins; an existing Help to Buy ISA is often worth keeping if you buy soon.
First-time buyers have been offered the same deal twice: save, and the government adds a quarter on top. The Help to Buy ISA launched first and the Lifetime ISA replaced it as the open option, and the differences can be worth thousands of pounds. This compares saving limits, bonus size, qualifying homes, bonus timing, and plan changes.
The head-to-head at a glance
| Feature | Help to Buy ISA | Lifetime ISA |
|---|---|---|
| Open to new savers? | No, closed 30 Nov 2019 | Yes, aged 18 to 39 |
| Maximum saving | £200 a month | £4,000 a year |
| Government bonus | 25%, capped at £3,000 | 25%, up to £1,000 a year |
| Property price cap | £250,000 (£450,000 London) | £450,000 anywhere in the UK |
| When the bonus arrives | At completion | Monthly, at exchange |
| Withdrawing for other reasons | No penalty, but no bonus | 25% charge |
| Also usable for retirement? | No | Yes, from age 60 |
On saving power, bonus size, property cap, and timing, the Lifetime ISA wins almost every row. The Help to Buy ISA wins on one: flexibility. You can take your money out at any time without penalty, losing only the bonus. With a Lifetime ISA, the wrong withdrawal costs real money.
The Help to Buy ISA in 2026: closed, but still paying out
In 2026, you cannot open a new Help to Buy ISA: the scheme closed to new applicants on 30 November 2019. But if you already hold one, it is far from dead. You can keep paying in up to £200 a month until 30 November 2029, with until 1 December 2030 to claim the bonus. The bonus is 25% of what you save, up to £3,000 on £12,000 saved, with at least £1,600 needed to qualify.
The home must cost no more than £250,000, or £450,000 in London, bought with a mortgage as your home. Crucially, the bonus is paid only at completion, not at exchange, so it cannot help with the exchange deposit. The compensation is safety: if you decide not to buy, withdraw with no government penalty, keeping your money plus interest, just without the bonus.
The Lifetime ISA: more power, sharper edges
The Lifetime ISA is the only one you can open today, and only aged 18 to 39. You can pay in up to £4,000 each tax year until 50, with a 25% monthly bonus up to £1,000 a year. The £4,000 counts towards your £20,000 annual ISA allowance; the bonus does not. You must have held it 12 months before using it for a first home.
Property rules are more generous: up to £450,000 anywhere in the UK, with the bonus available at exchange. You can also use it for retirement, penalty-free from age 60. MoneyHelper now notes two changes: a home over £450,000 brings a 20% charge but returns everything saved, and a First Time Buyer ISA replaces the Lifetime ISA from April 2029, though you can open one until then. The sharp edge remains: withdraw for any other reason and you pay 25% on the whole amount, including the bonus, taking back more than the bonus alone.
Worked example: five years of saving, side by side
Take two buyers saving the maximum, ignoring interest. The Lifetime ISA saver pays in £4,000 a year for five years (£20,000) and receives £1,000 of bonus each year (£5,000): a £25,000 pot. The Help to Buy ISA saver pays in £200 a month for five years (£12,000) and receives 25% on top (£3,000): a £15,000 pot. The gap is £10,000 and grows yearly, because the Help to Buy ISA bonus stops at £3,000 while the Lifetime ISA bonus keeps paying £1,000 a year.
Now the penalty. Suppose the Lifetime ISA saver withdraws the full £5,000 pot (£4,000 savings, £1,000 bonus) for a non-qualifying reason. The 25% charge is £1,250, leaving £3,750: the whole bonus lost, plus £250 of their own savings, or 6.25% of what they paid in. The same withdrawal from a Help to Buy ISA would return the full £4,000, just without the bonus. If you may not buy at all, that safety beats the bigger bonus.
Which wins for you?
Starting fresh aged 18 to 39, the Lifetime ISA wins, and it is not close: higher annual savings, an uncapped lifetime bonus, a nationwide property cap, and a bonus that arrives in time for exchange. Just be certain the money is for a first home or retirement, and keep an emergency fund elsewhere, as our 50/30/20 budget rule guide sets out.
Holding a Help to Buy ISA and buying within a year, staying put wins, because a new Lifetime ISA restarts the 12-month clock. If you will not buy for years, switching deserves a look, as higher limits and the uncapped bonus will overtake the £3,000 ceiling, though transfers count towards the £4,000 annual limit. If you are over 39, the Lifetime ISA is closed to new savers. If you hold both, only one bonus can go towards a home purchase, so choose the larger one; see types of saving accounts.
Sources & further reading
- MoneyHelper, Help to Buy ISA or Lifetime ISA?Deadlines, over-cap charge (verified 2 Nov 2026).
- MoneyHelper, Lifetime ISAsLimit, bonus, age, charge (verified 2 Nov 2026).
- MoneySavingExpert, Help to Buy ISAsMonthly limit, bonus, completion (verified 2 Nov 2026).
This article is general information only, not financial advice.