By Chandraketu Tripathi · Updated April 2026 · Fact-checked First-Time Buyers · April 2026If you are saving for your first home in 2026, understanding the difference between a Help to Buy ISA and a Lifetime ISA (LISA) is essential — though the choice is simpler than it used to be. The Help to Buy ISA closed to new applicants in November 2019, making the Lifetime ISA the only government-backed first-time buyer savings scheme currently available.
Help to Buy ISA in 2026 — Who Can Still Use It?If you opened a Help to Buy ISA before 30 November 2019, you can continue saving into it until 30 November 2029 and must claim your government bonus by 1 December 2030. The maximum government bonus is £3,000 (earned on £12,000 of savings). The maximum eligible property price is £250,000 (£450,000 in London) — significantly lower than the Lifetime ISA's £450,000 cap nationwide. If you already have a Help to Buy ISA, it is usually worth keeping it open until you are ready to buy, as long as the property you are targeting is within the price cap. The bonus is paid directly to your solicitor at completion — not into your account when you save. Lifetime ISA — The Better Choice for New SaversFor anyone who does not already have a Help to Buy ISA, the Lifetime ISA is the only option in 2026. Key features: open to UK residents aged 18-39; deposit up to £4,000 per year; government adds a 25% bonus (up to £1,000 per year); property price cap of £450,000; the LISA must be open for at least 12 months before use for property purchase; and a 25% withdrawal penalty applies for non-qualifying withdrawals. Over a 5-year period saving the maximum £4,000/year, a LISA generates £20,000 in personal savings plus £5,000 in government bonuses = £25,000 total — before interest. This is a substantially better outcome than the Help to Buy ISA's lifetime maximum bonus of £3,000. 💡 Open a Lifetime ISA as soon as you start saving for a first home — the 12-month waiting period before you can use it for a purchase means waiting is costly. Many first-time buyers open a LISA with an initial £1 deposit to start the 12-month clock ticking, then build up savings over time. Moneybox, AJ Bell and Beehive Money all offer competitive LISA rates. ⭐ OUR VERDICT For first-time buyers in 2026, the Lifetime ISA is the clear choice — the Help to Buy ISA is closed to new applicants and its £3,000 lifetime bonus limit is far lower than the LISA's potential £1,000/year ongoing bonus. Open a LISA as early as possible to maximise the government bonus and start the 12-month qualifying period. The main caution is the 25% withdrawal penalty for non-qualifying uses — only put in money you are certain you will use for a first home purchase or retirement. Frequently Asked QuestionsCan I still open a Help to Buy ISA in 2026? No. The Help to Buy ISA closed to new applicants on 30 November 2019. If you do not already have one, you cannot open a new Help to Buy ISA. The Lifetime ISA is the only government-backed first-time buyer savings account available to new savers in 2026. What is the maximum property price for a Lifetime ISA? The maximum property price for using a Lifetime ISA to buy a first home is £450,000. Properties above this price are not eligible — you cannot use the LISA for the purchase and would face the 25% withdrawal penalty if you withdraw the funds. The £450,000 cap has not been increased since the LISA launched in 2017. Can I have both a Help to Buy ISA and a Lifetime ISA? Yes — if you opened a Help to Buy ISA before November 2019, you can also hold a Lifetime ISA. However, you can only use the government bonus from one of them towards a first home purchase, not both. You can save into both simultaneously, but at completion you must choose which bonus to use. What happens to my Help to Buy ISA if I do not buy a property? If you do not buy a property, you can withdraw your Help to Buy ISA savings at any time, but you forfeit the government bonus. The bonus is only paid at the point of property completion. If you keep the account open, you can continue saving until November 2029 and claim the bonus by December 2030. |
Help to Buy ISA vs Lifetime ISA 2026: Which Is Better for First-Time Buyers?
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