Lifetime ISA
£4,000 annual allowance · typical return varies by holding
Annual allowance
£4,000
2026/27 tax year
Government bonus
25%
up to £1,000/year
Age eligibility
18-39 open
UK residents
Typical return
varies by holding
varies risk
20% of the cross-wrapper £20,000 cap
Lifetime ISA vs other ISA wrappers
Annual subscription allowance comparison
Key insight
UK savers aged 18-39 open can subscribe up to £4,000 annually into a Lifetime ISA. The government adds 25% on top of contributions, worth up to £1,000 a year. There's no flat risk band or return figure for this wrapper; both depend on whether you choose the cash or stocks & shares variant.
Good match: First-home buyers under £450k cap (18-39), retirement supplement under 50. Poor match: Emergency fund, access before 60 without first-home.
Derived from gov.uk Individual Savings Accounts + the HMRC ISA Manager Guidance Notes (2026/27 tax year). Additional context from HMRC ISA Statistics.
Rules at a glance
| Attribute | Lifetime ISA | Source |
|---|---|---|
| Annual allowance | £4,000 - Sub-limit within £20k overall cap | gov.uk ISAs |
| Government bonus | 25% on contributions, up to £1,000/year | HMRC ISA Manual |
| Age eligibility | 18-39 open | HMRC ISA Manager Guidance |
| Risk band | varies | FCA Conduct of Business |
| Typical return | varies by holding | Per underlying holding |
| FSCS protection | Protected up to £85,000 per banking authorisation | FSCS |
| Withdrawal rules | Penalty-free: first-home (<=£450k), age 60+, terminal illness. Otherwise 25% government charge. | HMRC ISA Manual |
| Transfer rules | LISA to other ISA: 25% charge unless qualifying. Other to LISA counts vs £4k sub-limit. | HMRC ISA Manual |
| Tax treatment | Interest, dividends, capital gains exempt from UK Income Tax and CGT | Income Tax Act 2007 s.694 |
Table sources: gov.uk Individual Savings Accounts, HMRC ISA Managers Guidance Notes, Income Tax Act 2007 s.694.
Frequently asked questions
Can I transfer between Lifetime ISA providers?
Yes, transfers between providers are allowed via the receiving provider's transfer form and don't touch your £20,000 annual allowance. LISA to other ISA: 25% charge unless qualifying. Other to LISA counts vs £4k sub-limit.
Can I subscribe to multiple Lifetime ISAs in one tax year?
Lifetime ISAs are capped at one per tax year, even though the wider 6 April 2024 rule change allows multiple subscriptions to other same-type ISAs. The £4,000 LISA sub-limit sits within your £20,000 overall allowance.
Disclaimer & how ISA wrappers are taxed
Every ISA wrapper -- not just this one -- shelters interest, dividends, and capital gains from UK Income Tax and Capital Gains Tax, with no Self Assessment reporting required. Compared to saving outside any ISA wrapper, that matters most for higher-rate and additional-rate taxpayers; basic-rate taxpayers benefit primarily once their non-ISA interest exceeds the £1,000 Personal Savings Allowance.
PlainISA does not provide financial advice. For personalised guidance on which ISA wrapper suits your circumstances, consult an FCA-authorised financial adviser. See our methodology page for sourcing.
Browse all ISA types side-by-side or see our goal-mapped wrapper choice guide.