What a Lifetime ISA adds
You can put up to £4,000 into a Lifetime ISA each tax year and the government adds a 25% bonus, up to £1,000 a year. You must make your first payment before age 40. Contributions can continue until age 50, and the LISA allowance sits inside the overall annual ISA allowance.
A cash LISA avoids investment-market movements, while a stocks and shares LISA can rise or fall. The right choice depends partly on how soon you may buy. Money needed for a near-term purchase generally cannot tolerate the same investment risk as long-term savings.
The first-home withdrawal rules
For a charge-free first-home withdrawal, the property must cost £450,000 or less and the purchase must be at least 12 months after your first LISA payment. You must buy with a mortgage and use a solicitor or conveyancer, who receives the money directly from the provider.
You must intend to live in the property as your main residence. The withdrawal is normally made when completion is expected within 90 days, although the conveyancer can request an extension if a transaction is delayed.
Buying with someone else
If both buyers are eligible first-time buyers with LISAs, both can use them towards the same purchase. The £450,000 cap applies to the property price, not separately to each buyer. If one buyer has owned a home before, the eligible first-time buyer may still be able to use their own LISA, but check the transaction with the provider and conveyancer.
LISA eligibility is separate from stamp duty eligibility. Joint-buyer rules can differ between schemes and taxes, so never assume qualifying for one benefit proves that you qualify for another.
The 25% withdrawal charge is bigger than losing the bonus
A non-qualifying withdrawal before age 60 normally attracts a 25% charge. Because the charge applies to the whole pot after the bonus was added, it can take back the bonus and some of your own money. For example, £4,000 plus a £1,000 bonus becomes £5,000; a 25% charge leaves £3,750.
That makes the LISA less flexible than an ordinary savings account. Keep emergency savings outside it and think carefully if your likely purchase price may exceed £450,000.
Avoid a last-minute LISA delay
Tell your conveyancer and LISA provider early. Ask what forms and notice they require, check that the account has passed its 12-month anniversary and do not withdraw the deposit to your own bank account. The formal withdrawal must follow the scheme process.
Sources and further reading
- GOV.UK: Lifetime ISA overview
- GOV.UK: Withdrawing from a Lifetime ISA
- HMRC: Lifetime ISA first-home withdrawals
Rules can change and providers have their own processes. This article is general information and was last checked on 11 August 2026.