Comparison · Savings & First Homes · 2026
Lifetime ISA vs Help to Buy ISA 2026: Should Existing HTB Holders Switch?
The Help to Buy ISA closed to new savers back in 2019, but hundreds of thousands of existing holders are still saving into one -- and wondering whether it is still worth it next to a Lifetime ISA. This guide compares both for existing HTB holders using 2026/27 allowances and bonus rates.
TL;DR -- 30-Second Summary
- • Help to Buy ISA is closed to new savers -- only pre-Nov-2019 holders can keep contributing
- • Lifetime ISA: up to GBP 4,000/year, 25% bonus (max GBP 1,000/year), inside your GBP 20,000 ISA allowance
- • Help to Buy ISA: up to GBP 200/month, 25% bonus paid once at completion, not monthly
- • You can hold both, but can only use one account's bonus on a single home purchase
- • Non-qualifying LISA withdrawals trigger a government charge that claws back part of your own money too
Side-by-Side Comparison
| Feature | Lifetime ISA | Help to Buy ISA |
|---|---|---|
| Open to new savers? | Yes | No -- closed since Nov 2019 |
| Annual contribution limit | GBP 4,000 | GBP 200/month (plus GBP 1,200 initial deposit) |
| Government bonus | 25%, added as you save | 25%, paid once at completion |
| Property price limit | GBP 450,000 anywhere in the UK | GBP 250,000 (GBP 450,000 in London) |
| Non-home withdrawal | Government withdrawal charge applies | No penalty -- lose the bonus only |
| Also usable for retirement (60+) | Yes, penalty-free from age 60 | No |
| Counts towards GBP 20,000 ISA allowance | Yes | Yes, for holders subject to the allowance rules |
Worked Example: Saving GBP 4,000 in a Year
An existing Help to Buy ISA holder who can afford to save GBP 4,000 over a tax year compares putting all of it into their Help to Buy ISA against opening a Lifetime ISA for the same amount.
| Measure | Help to Buy ISA | Lifetime ISA |
|---|---|---|
| Amount actually accepted | GBP 2,400 max (GBP 200 x 12 months) | GBP 4,000 (full annual limit) |
| 25% bonus on that amount | GBP 600 (paid once at completion) | GBP 1,000 (added as you save) |
| Remaining GBP 1,600 of the GBP 4,000 | Cannot be paid in -- exceeds monthly cap | Accepted and bonused at 25% |
For a saver who can put aside more than GBP 200 a month, the Help to Buy ISA's fixed monthly cap becomes the binding constraint, not the bonus rate itself. A Lifetime ISA lets the same saver earn the 25% bonus on the full GBP 4,000, an extra GBP 400 of bonus in this example purely from the higher contribution ceiling.
When a Lifetime ISA Wins
A Lifetime ISA wins for anyone who can save more than GBP 200 a month towards a first home, since the Help to Buy ISA's cap simply cannot absorb more. It also wins for buyers targeting properties above GBP 250,000 outside London, since the Help to Buy ISA price cap would block the bonus entirely on a higher-value purchase that a Lifetime ISA still allows up to GBP 450,000.
When Keeping the Help to Buy ISA Still Makes Sense
If you are already close to completing a purchase and your Help to Buy ISA has years of contributions built up, there is usually little reason to disturb it -- simply keep saving up to GBP 200 a month and claim the bonus at completion. It also avoids the Lifetime ISA's early-withdrawal charge risk, since there is no equivalent penalty if your home purchase plans change and you need the money back for something else.
Frequently Asked Questions
Frequently Asked Questions
Can I still open a new Help to Buy ISA in 2026?
No. The Help to Buy ISA closed to new applicants on 30 November 2019. If you already had one open before that date, you can keep saving into it and can still open a fresh Help to Buy ISA with a different provider only by transferring an existing one -- you cannot start one from scratch in 2026. Anyone without an existing Help to Buy ISA who wants a government-boosted route to a first home deposit needs a Lifetime ISA instead.
How much can I pay into a Lifetime ISA each year?
You can pay in up to GBP 4,000 per tax year into a Lifetime ISA (2026/27), which sits inside your overall GBP 20,000 ISA allowance rather than on top of it. The government adds a 25% bonus on what you pay in, so the maximum annual bonus is GBP 1,000 if you contribute the full GBP 4,000. You can hold a Lifetime ISA alongside other ISA types as long as your total contributions across all of them do not exceed GBP 20,000.
How does the Help to Buy ISA bonus compare to the Lifetime ISA bonus?
Both pay a 25% government bonus, but the mechanics differ. A Help to Buy ISA lets you save up to GBP 200 a month (plus an initial deposit of up to GBP 1,200 in the first month), and the 25% bonus is only paid out once, at completion, when you buy your first home -- not added monthly as you save. A Lifetime ISA's 25% bonus is typically added monthly or annually by the provider as you contribute, and the GBP 4,000 annual limit is far higher than what a Help to Buy ISA allows you to save in a year.
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What happens if I withdraw from a Lifetime ISA for something other than a first home?
Unless you are withdrawing to buy your first home, are terminally ill, or are aged 60 or over, withdrawing from a Lifetime ISA triggers a government withdrawal charge, which claws back not just the bonus but also a portion of your own original contribution -- making an early withdrawal for the wrong reason a real net loss. A Help to Buy ISA has no equivalent penalty: if you decide not to buy a home, you can simply withdraw your own savings without the bonus, but without losing any of your own money either.
Can I use both a Lifetime ISA and a Help to Buy ISA to buy the same home?
No. If you hold both, you must choose one account's bonus to put towards a single property purchase -- you cannot combine the government bonuses from a Help to Buy ISA and a Lifetime ISA on the same completion. You are allowed to hold both accounts at the same time, but only one can actually be used towards a given house purchase.
Is there a property price limit on either scheme?
Yes, and the two schemes use different limits. A Lifetime ISA can be put towards a first home worth up to GBP 450,000 anywhere in the UK. A Help to Buy ISA bonus can be used on a first home worth up to GBP 250,000 outside London, or up to GBP 450,000 within London. If your target property exceeds the relevant limit, the government bonus from that scheme cannot be used on the purchase.
What is the deadline for using an existing Help to Buy ISA?
Existing Help to Buy ISA holders can keep contributing until November 2029, and must claim their government bonus by December 2030. After those dates the scheme fully winds down. If your home purchase is likely to complete after those cut-offs, you should plan to rely on a Lifetime ISA or another route for the bonus, since the Help to Buy ISA bonus cannot be claimed once the scheme has closed.
Should an existing Help to Buy ISA holder switch to a Lifetime ISA?
It often makes sense to keep the Help to Buy ISA where it is and open a separate Lifetime ISA alongside it, rather than transferring, since the Help to Buy ISA already benefits from years of prior monthly contributions. Whether switching entirely is worth it depends on your savings rate: if you can save more than GBP 200 a month, only a Lifetime ISA lets that extra saving earn the 25% bonus, since the Help to Buy ISA monthly cap stays fixed regardless of how much you can afford to save.
Does either scheme affect other ISA allowances?
A Lifetime ISA's GBP 4,000 counts inside your GBP 20,000 total annual ISA allowance, leaving GBP 16,000 available for other ISA types in the same tax year. A Help to Buy ISA also counts as a form of cash ISA for annual allowance purposes for holders who opened one before the rules changed, so check with your provider how your specific account interacts with your wider ISA allowance before assuming you have the full GBP 20,000 free elsewhere.
What if I already own a home -- can I still use either account?
No. Both schemes are restricted to first-time buyers. If you have ever owned a home or a share of one anywhere in the world, you cannot use either the Lifetime ISA or Help to Buy ISA bonus towards a purchase, even if you are not currently a homeowner. You could still hold a Lifetime ISA purely as a retirement savings vehicle and withdraw penalty-free from age 60, but the first-home bonus route would not be available to you.
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Disclaimer: This comparison is general information for 2026/27 based on standard Lifetime ISA and Help to Buy ISA scheme rules and simplified assumptions. It is not financial advice. Scheme deadlines, property price limits and provider terms can change -- check gov.uk and your own provider before making decisions.