LISA vs Help to Buy vs Stocks & Shares ISA
Which ISA gets you onto the property ladder fastest — the one with the government bonus, the closed legacy account, or the one chasing market growth?
If you’re saving for a first home, three ISAs come up — but they’re not equal options, and one isn’t really an option at all any more. The Lifetime ISA (LISA) is the headline product: save up to £4,000 a year and the government adds a 25% bonus, worth up to £1,000 a year, for a first home or retirement. The Help to Buy ISA offered a similar 25% bonus, but it closed to new savers in November 2019 — only existing holders can still pay in, so for most people starting today it’s off the table. A Stocks & Shares ISA has no bonus, but its money can grow with the markets — though that growth would need to beat the LISA’s guaranteed 25% to win, which is a high bar over a few years. The catch with the LISA is real too: take the money out for anything other than a first home (under £450,000) or age 60, and a 25% penalty means you lose some of your own savings. And the LISA itself is closing to new applicants from April 2028. This guide compares all three so you can see which fits your timeline and goal. To work out how much to save, see the Savings Goal Calculator; for what you could borrow, Mortgage Affordability.
Your goal
Savings plan
Property and eligibility
LISA assumptions
HTB and S&S ISA assumptions
Comparison result
Best projected option
Calculating…
Calculating…
Lifetime ISA value
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Help to Buy ISA value
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S&S ISA value
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LISA bonus
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HTB bonus
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Eligibility warning
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The three accounts at a glance
The left table sets the three side by side on the features that decide which suits you. The right shows the government bonus each delivers on the same saving. The headline difference: the LISA and Help to Buy ISA both add a 25% bonus, while a Stocks & Shares ISA relies on market growth instead — but Help to Buy is closed to new savers, and the LISA closes to new applicants from April 2028.
| Feature | LISA | HTB | S&S |
|---|---|---|---|
| Govt bonus | 25% | 25% | None |
| Max/year | £4,000 | £2,400 | £20,000 |
| Open to new? | Yes* | No | Yes |
| Property cap | £450k | £250k† | None |
| Saved | LISA bonus | S&S bonus |
|---|---|---|
| £1,000 | £250 | £0 |
| £2,000 | £500 | £0 |
| £4,000 | £1,000 | £0 |
| £20,000 (5yr) | £5,000 | £0 |
*The LISA is open to new applicants aged 18–39 until April 2028, after which no new accounts can be opened. †The Help to Buy property cap is £250,000, rising to £450,000 in London. The Help to Buy ISA is closed to new savers; existing holders can pay in until November 2029. Figures reflect current allowances and rules, which can change.
How each account works
All three are ISAs — so growth is tax-free — but they’re built for different purposes, and only two of them you can actually open today. Understanding what each does makes the choice straightforward.
The Lifetime ISA — the live first-home account
The LISA is the government’s current first-home and retirement product. You can pay in up to £4,000 a year (which counts toward your overall £20,000 ISA allowance), and the government adds a 25% bonus — up to £1,000 a year. You must be 18 to 39 to open one, can keep paying in until 50, and the account must be open at least 12 months before you use it. It buys a first home worth up to £450,000 anywhere in the UK. The trade-off: withdraw for anything other than a first home or reaching age 60 and you pay a 25% penalty on the amount withdrawn — which claws back more than the bonus.
The Help to Buy ISA — closed, but not gone
The Help to Buy ISA offered the same 25% bonus but closed to new applicants on 30 November 2019. If you already have one, you can keep paying in up to £200 a month until November 2029 and claim the bonus (capped at £3,000) by December 2030. Its limits are tighter than the LISA’s: a lower monthly contribution, a smaller property cap of £250,000 (£450,000 in London), and the bonus is only paid on completion — so it can’t form part of your deposit at exchange. For anyone starting to save today, it isn’t an option; the relevant question is whether to keep an existing one or transfer it to a LISA.
The Stocks & Shares ISA — growth, not a bonus
A Stocks & Shares ISA has no government bonus, but your money is invested and can grow with the markets, tax-free, with no property price cap and no withdrawal penalty. You can pay in up to your full £20,000 ISA allowance. The catch is that investments can fall as well as rise — so for a deposit you’ll need within a few years, the risk often outweighs the potential gain. To beat the LISA, the investments would need to grow faster than the guaranteed 25% bonus, which is a tall order over a short horizon.
Worked examples
Four scenarios: the LISA bonus, the LISA-versus-S&S growth question, the penalty trap, and a couple saving together.
Scenario 1 · The LISA bonus
£20,000 saved becomes £25,000
Contributions £20,000 + bonus £5,000
= £25,000 before any interest or growth
Saving the full £4,000 a year for five years puts £20,000 of your own money in, and the government adds £5,000 in bonuses — a £25,000 deposit pot before any interest. That’s a guaranteed 25% uplift no ordinary savings account or cash ISA can match. For an eligible first-time buyer with a home in the LISA’s price range, the bonus alone makes it hard to beat. The bonus is paid monthly on a cash LISA, so it starts compounding interest of its own straight away.
Scenario 2 · LISA vs Stocks & Shares
What growth would S&S need to win?
LISA cash: £20,000 + £5,000 bonus = £25,000
S&S ISA at 5%/year: ~£23,200 (no bonus)
This is the key comparison for a first-time buyer. The LISA’s guaranteed 25% bonus turns £20,000 into £25,000. For a Stocks & Shares ISA to match that over five years, the investments would need to grow by around 4.6% a year just to draw level — and they could equally fall. Over a short deposit timeline, the certainty of the LISA bonus usually beats hoping for market growth. The S&S ISA’s advantage only really shows over much longer horizons, where compounding has time to outrun the one-off bonus.
Scenario 3 · The penalty trap
Withdrawing a LISA the wrong way
Withdraw not for a home or age 60: 25% penalty
Penalty £1,250 → you get back £3,750
The LISA’s penalty is harsher than it first looks. If you take money out for anything other than a qualifying first home or reaching age 60, you pay a 25% charge on the whole amount withdrawn — not just the bonus. On a £5,000 pot, that’s £1,250, leaving £3,750. You put in £4,000, so you’ve lost £250 of your own money on top of the bonus. This is why a LISA only suits money you’re confident you’ll use for a first home (within the price cap) or leave until 60.
Scenario 4 · A couple saving together
Two LISAs, double the bonus
Each: £4,000/year + £1,000 bonus
Combined bonus: £2,000/year
If two first-time buyers are buying together, each can have their own LISA and each claims their own bonus — up to £1,000 a year apiece, so £2,000 a year between them. Both can use their LISAs toward the same property, provided each meets the rules. Over a few years of saving, that doubled bonus makes a real dent in a deposit. The same principle applied to the old Help to Buy ISA, where a couple could claim up to £6,000 in total bonuses between two accounts.
Choosing between them — four questions
Most comparisons just list features. But the real decision turns on a few specifics about your situation — and on the fact that one option is closed and another is closing. Work through these four:
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1
Are you starting from scratch, or do you have a Help to Buy ISA?
If you’re starting today, Help to Buy isn’t available — it closed to new savers in 2019. The choice is really LISA versus Stocks & Shares ISA. If you already have a Help to Buy ISA, the question is whether to keep it or transfer to a LISA for the higher limits and bigger potential bonus.
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2
How soon will you buy, and how certain are you?
For a home in the next few years, the LISA’s guaranteed 25% bonus beats hoping for market growth — a Stocks & Shares ISA would need ~4.6% a year just to match it, and could fall. But only commit to a LISA if you’re confident you’ll buy within the rules, because the penalty bites otherwise.
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3
Will your home fall within the £450,000 cap?
The LISA only works for a first home costing £450,000 or less — buy above that and you face the 25% penalty to access your money. In high-price areas this matters. The old Help to Buy cap was lower still (£250,000, or £450,000 in London). A Stocks & Shares ISA has no cap at all.
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4
Have you noted the LISA’s closing window?
The government has confirmed the LISA closes to new applicants from April 2028, to be replaced by a new first-time buyer ISA. If a LISA might suit you, opening one now — even with a small deposit — secures access before the door shuts. Existing holders are unaffected and can keep contributing.
£4,000 saved — what each delivers
On the same £4,000, for a first-home deposit:
*Help to Buy gives the same 25% but caps the total bonus at £3,000 and limits you to £200 a month, so it builds more slowly — and only if you already hold one. For most first-time buyers starting today, the practical answer is clear: if your home falls within £450,000 and you’ll buy within a few years, a LISA’s guaranteed bonus is hard to beat, so open one before the April 2028 deadline. A Stocks & Shares ISA suits longer horizons or those who’d breach the LISA cap. And if you have an old Help to Buy ISA, weigh keeping it against transferring to a LISA. The one rule that overrides all of this: don’t put money in a LISA you might need for something other than a first home, because the penalty makes early access costly.
Can you hold more than one?
Yes — you can pay into a LISA, a Stocks & Shares ISA, and a cash ISA in the same tax year, as long as your total contributions stay within the £20,000 annual ISA allowance (of which a maximum of £4,000 can go into the LISA). Some first-time buyers do exactly this: max the LISA for the guaranteed bonus, then put additional savings into a Stocks & Shares or cash ISA. If you hold both a LISA and an old Help to Buy ISA, you can keep contributing to both, but you can only use the bonus from one of them when you buy — so pick whichever gives the better deal.
Two scenarios that change the picture
What if…
You bought a home above £450,000?
What if…
You have an old Help to Buy ISA?
Key first-home ISA terms explained
Comparing these accounts means meeting a cluster of terms — bonuses, caps, penalties, allowances. The ten below cover what you’ll need to read the rules clearly.
- Lifetime ISA (LISA)
- An ISA for a first home or retirement, paying a 25% government bonus on up to £4,000 a year. Open at 18–39, closing to new applicants from April 2028.
- Help to Buy ISA
- A first-home cash ISA with a 25% bonus, closed to new savers since November 2019. Existing holders can pay in £200/month until November 2029, with a £3,000 bonus cap.
- Stocks & Shares ISA
- An ISA holding investments rather than cash. No government bonus, but tax-free growth, no property cap, and no withdrawal penalty — though values can fall.
- Government bonus
- The 25% top-up the government adds to LISA and Help to Buy contributions. On the LISA it’s paid monthly, up to £1,000 a year; on Help to Buy, at completion, capped at £3,000.
- Withdrawal penalty
- The LISA’s 25% charge on money taken out for anything other than a qualifying first home or age 60. Because it applies to the whole amount, you lose some of your own savings too.
- Property price cap
- The maximum home value the bonus can be used for: £450,000 for the LISA UK-wide, and £250,000 (£450,000 in London) for Help to Buy. Buy above it and the penalty applies.
- First-time buyer
- Someone who has never owned property anywhere. A condition for using the LISA or Help to Buy bonus toward a home — both buyers in a couple must qualify to each claim.
- ISA allowance
- The £20,000 a year you can pay across all ISAs combined, of which a maximum of £4,000 can go into a LISA. You can split it across cash, stocks & shares, and a LISA.
- ISA transfer
- Moving money between ISAs using the formal transfer process, not by withdrawing it. Transferring a Help to Buy ISA to a LISA preserves tax status but counts toward the £4,000 limit.
- 12-month rule
- A LISA must be open for at least 12 months before its bonus can be used to buy a home. Opening one early — even with a small deposit — starts this clock.
Five mistakes people make with first-home ISAs
These accounts have rules that catch people out, sometimes expensively. These five errors, drawn from the recurring r/UKPersonalFinance and r/HousingUK threads, are the common ones.
Putting money in a LISA you might need elsewhere
The LISA penalty applies to the whole withdrawal, not just the bonus, if you take money out for anything but a first home or age 60. On a £5,000 pot that’s £1,250 — leaving £3,750 from £4,000 paid in. Only put money in a LISA you’re confident you’ll use as intended.
Cost: lose £250+ of your own money Fix: only fund a LISA for a first home or age 60Forgetting the 12-month rule
A LISA must be open for 12 months before its bonus can buy a home. People open one just before buying and find they can’t use it in time. If a LISA might suit you, open one early with even a small deposit to start the clock — well before you need it.
Cost: bonus unusable when you buy Fix: open a LISA early to start the 12-month clockInvesting a short-term deposit in a Stocks & Shares ISA
Hoping market growth beats the LISA bonus, some put deposit savings in a Stocks & Shares ISA — but investments can fall just when you need the money. To match the LISA’s guaranteed 25% over five years, growth would need ~4.6% a year with no certainty. For a near-term deposit, the bonus usually wins.
Cost: a deposit that shrinks at the wrong time Fix: use a cash LISA for a near-term depositWithdrawing a Help to Buy ISA instead of transferring
Moving an old Help to Buy ISA to a LISA by withdrawing the cash loses the bonus and the tax-free status. You must use the formal ISA transfer process. People who simply take the money out and re-deposit it can forfeit years of accumulated benefit.
Cost: lost bonus and ISA status Fix: use the formal transfer process, never withdrawMissing the LISA’s April 2028 closing date
The LISA closes to new applicants from April 2028. Anyone who might want one but waits too long loses the chance entirely. Even if you’re unsure, opening one now with a small deposit secures access — existing holders are unaffected when the scheme closes to new applications.
Cost: losing access to the bonus permanently Fix: open one before April 2028 to lock in accessFrequently asked questions
LISA or Help to Buy ISA — which is better?
For anyone starting to save today it’s a moot point: the Help to Buy ISA closed to new savers in November 2019, so a LISA is the only one of the two you can open. The LISA also offers more — a higher £4,000 annual limit, a £450,000 property cap UK-wide, and a bonus you can use as part of your deposit.
If you already hold a Help to Buy ISA, you can keep paying in until November 2029, or transfer it to a LISA for the higher limits. The main downside of the LISA is its 25% penalty for non-qualifying withdrawals.
Can I still open a Help to Buy ISA?
No. The Help to Buy ISA closed to new applicants on 30 November 2019 and can’t be opened any more. If you opened one before then, you can keep paying in up to £200 a month until November 2029 and must claim your bonus by December 2030.
For first-time buyers starting today, the equivalent option is the Lifetime ISA, which offers the same 25% government bonus with higher limits — though it too is closing to new applicants from April 2028.
How does the 25% LISA bonus work?
The government adds 25% to whatever you pay into a LISA, up to £1,000 a year on the maximum £4,000 contribution. Save £4,000 and you get £1,000 free, turning it into £5,000. On a cash LISA the bonus is paid monthly, so it starts earning interest straight away.
Over five years of maximum contributions, that’s £20,000 of your own money plus £5,000 in bonuses — a guaranteed 25% uplift no ordinary savings account can match. The bonus can be used toward a first home worth up to £450,000, or accessed penalty-free from age 60.
What’s the LISA withdrawal penalty?
If you take money out of a LISA for anything other than a qualifying first home or reaching age 60, you pay a 25% charge on the amount withdrawn. Because it applies to the whole sum — your contributions plus the bonus — you actually lose some of your own money.
On a £5,000 pot (£4,000 paid in plus £1,000 bonus), the penalty is £1,250, leaving £3,750 — £250 less than you put in. This is why a LISA only suits money you’re confident you’ll use for a first home within the price cap, or leave untouched until 60.
Should I use a Stocks & Shares ISA for a house deposit instead?
Usually not for a near-term deposit. A Stocks & Shares ISA has no bonus and its value can fall as well as rise — a risk you don’t want on money you’ll need within a few years. To beat the LISA’s guaranteed 25%, the investments would need to grow by around 4.6% a year just to draw level.
A Stocks & Shares ISA makes more sense for longer horizons, where time lets compounding outrun the one-off bonus, or if your likely home exceeds the LISA’s £450,000 cap. For a deposit you’ll need soon, a cash LISA’s certainty usually wins.
Can I have a LISA and a Stocks & Shares ISA at the same time?
Yes. You can pay into a LISA, a Stocks & Shares ISA, and a cash ISA in the same tax year, as long as your total contributions stay within the £20,000 ISA allowance, of which a maximum of £4,000 can go into the LISA.
Some first-time buyers do exactly this: max the LISA for the guaranteed bonus, then put further savings into another ISA. If you also hold an old Help to Buy ISA, you can keep contributing to both it and a LISA, but you can only use one bonus when you actually buy.
Can a couple both get the bonus?
Yes. If two first-time buyers are purchasing together, each can have their own LISA and claim their own bonus — up to £1,000 a year each, so £2,000 a year between them, both usable toward the same property.
Each buyer must individually meet the rules (first-time buyer, account open 12 months, home within the cap). The same applied to the old Help to Buy ISA, where a couple could claim up to £6,000 in total bonuses across two accounts.
When is the LISA closing?
The government has confirmed the Lifetime ISA will close to new applicants from April 2028, to be replaced by a new first-time buyer ISA. No new LISAs can be opened after that date.
If you already hold a LISA, nothing changes — you can keep contributing up to £4,000 a year and receive the bonus as before. If you think a LISA might suit you, opening one now, even with a small deposit, secures access and starts the 12-month clock before the window closes.
Related calculators
Saving for a first home connects to your deposit goal, what you can borrow, and the tax wrappers around your savings. These calculators handle each piece.
Methodology & sources
How the comparison works
The calculator compares the three accounts on the features that decide which suits a first-time buyer: the government bonus, contribution limits, property price caps, withdrawal rules, and whether each is open to new savers. The LISA bonus is calculated as 25% of contributions, up to £1,000 a year on the maximum £4,000; the Help to Buy bonus is 25% capped at a £3,000 total. The LISA penalty is shown as 25% of any non-qualifying withdrawal, applied to the whole amount, which is why it removes more than the bonus. Where a Stocks & Shares ISA is compared, illustrative investment growth is applied to show what return would be needed to match the LISA’s guaranteed bonus over a given period. Combined contributions across all ISAs are assumed to stay within the £20,000 annual allowance, with a maximum of £4,000 into the LISA.
These are illustrative comparisons to help you understand the options, not personal advice or a recommendation. The right choice depends on your age, timeline, the price of the home you’re likely to buy, your certainty about using the money for a first home, and your attitude to investment risk. Rules, allowances, bonus caps, property caps, and scheme dates are set by government and change over time — including the Help to Buy ISA’s closure to new savers and the planned closure of the LISA to new applicants — so always check the current rules before deciding. Investment values can fall as well as rise. The aim is to help you compare the accounts for your situation, not to recommend a specific product.
Key facts used (current rules)
- LISA: 25% bonus, up to £4,000/yr (£1,000 bonus), open at 18–39
- LISA: closing to new applicants from April 2028
- LISA penalty: 25% on non-qualifying withdrawals
- LISA property cap: £450,000 UK-wide; 12-month rule applies
- Help to Buy: closed to new savers since Nov 2019; pay in to Nov 2029
- Help to Buy: £200/mo, £3,000 bonus cap, £250k cap (£450k London)
- S&S ISA: no bonus, market growth, no cap or penalty
- ISA allowance: £20,000/yr total, max £4,000 into a LISA