Lifetime ISA (LISA)
£4,000 annual allowance · typical return 25% bonus + growth
Annual allowance
£4,000
2025/26 tax year
Government bonus
25%
on contributions
Age eligibility
18-39 open
UK residents
Typical return
25% bonus + growth
varies risk
20% of the cross-wrapper £20,000 cap
Lifetime ISA (LISA) vs other ISA wrappers
Annual subscription allowance comparison
Key insight
The Lifetime ISA (LISA) offers a £4,000 annual subscription allowance for UK residents aged 18-39 open. HMRC adds a 25% government bonus on contributions, up to £1,000/year. This wrapper sits in the varies risk band; historical typical returns are 25% bonus + growth. Inside the wrapper, interest, dividends, and capital gains are exempt from UK Income Tax and Capital Gains Tax — no Self Assessment reporting required.
Compared to UK savings outside any ISA wrapper, the Lifetime ISA (LISA) provides material tax-efficiency for higher-rate and additional-rate taxpayers; basic-rate taxpayers benefit primarily once their non-ISA interest exceeds the £1,000 Personal Savings Allowance. The Lifetime ISA (LISA) sits alongside the other three ISA types (Cash, Stocks & Shares, Lifetime, Innovative Finance) sharing the overall £20,000 cap across all wrappers.
Derived from gov.uk Individual Savings Accounts + the HMRC ISA Manager Guidance Notes (2025/26 tax year). Additional context from HMRC ISA Statistics.
Rules at a glance
| Attribute | Lifetime ISA (LISA) | Source |
|---|---|---|
| Annual allowance | £4,000 | gov.uk ISAs |
| Government bonus | 25% on contributions | HMRC ISA Manual |
| Age eligibility | 18-39 open | HMRC ISA Manager Guidance |
| Risk band | varies | FCA Conduct of Business |
| Typical real return | 25% bonus + growth | FTSE Russell + ONS |
| 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 (LISA) providers?
Yes. Use the receiving provider's transfer form. Transfers do NOT count against the £20,000 annual subscription allowance.
Can I subscribe to multiple Lifetime ISA (LISA)s in one tax year?
Since 6 April 2024, you can subscribe to multiple ISAs of the same type within a single tax year (except LISA which remains one-per-year). The £20,000 overall cap still applies.
Disclaimer
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.