TL;DR
Help to Buy ISA closed to new savers in November 2019 but existing holders continue with GBP 200/month and a 25% bonus paid at home purchase capped at GBP 3,000. The Lifetime ISA offers a higher bonus paid during saving with a GBP 450,000 property cap. This guide compares them and covers transfers.
Key facts
- Help to Buy ISA closed to new savers from 30 November 2019.
- Existing HTB ISA holders contribute up to GBP 200 a month.
- HTB ISA bonus 25% capped at GBP 3,000 paid at home completion.
- HTB ISA property cap: GBP 250,000 outside London, GBP 450,000 within.
- Bonus claim deadline for HTB ISA: 1 December 2030.
- LISA bonus 25% paid monthly during saving (uncapped except by GBP 4,000 annual cap).
- LISA property cap GBP 450,000 UK-wide.
- Transferring HTB ISA to LISA preserves balances but counts against LISA annual limit.
The Help to Buy ISA and Lifetime ISA were the two main government-bonus-backed first-time-buyer schemes introduced under the 2015 and 2017 reforms respectively. Help to Buy ISA was closed to new savers in November 2019 but existing holders continue. The LISA remains available to savers aged 18 to 39.
For existing Help to Buy ISA holders the question is often whether to transfer to LISA, continue HTB ISA, or run both in parallel. This guide compares the features and walks through the transfer mechanics.
Help to Buy ISA features and limits
The Help to Buy ISA is a Cash ISA variant with government bonus. Account opening closed 30 November 2019; existing holders contribute up to GBP 200 a month (GBP 1,200 in the first month) and earn the bank's interest rate plus a one-time government bonus of 25% at home completion, capped at GBP 3,000 of bonus on a GBP 12,000 balance.
The bonus is claimed by the conveyancer at completion of the first-home purchase. The property must be in the UK, valued at no more than GBP 250,000 outside London or GBP 450,000 within Greater London. The buyer must be a genuine first-time buyer with a residential mortgage.
Interest accrues at the provider's variable rate. Most HTB ISA rates have run between 2% and 5% AER over the scheme's life. Interest is tax-free under the ISA wrapper.
Bonus claim deadline is 1 December 2030. After that date no further bonus claims are accepted, though the underlying balances remain accessible. Most HTB ISA holders intending to buy a home will do so well before 2030, but the deadline matters for any held-long balances.
Lifetime ISA features
The Lifetime ISA is open to UK residents aged 18 to 39 with contributions up to GBP 4,000 a year (within the GBP 20,000 ISA allowance). The 25% bonus is paid monthly into the LISA by HMRC during saving, not at home completion. Maximum lifetime bonus around GBP 33,000 if maxed every year from 18 to 50.
LISA property cap is GBP 450,000 UK-wide. Withdrawal for first home is penalty-free after the LISA has been open 12 months. Other withdrawals before age 60 attract a 25% penalty (effective ~6.25% loss on contributions). Withdrawal at age 60+ is penalty-free for any purpose.
Cash LISA and Stocks and Shares LISA variants are both available. Internal transfers between variants within the same provider are typically permitted; provider-to-provider transfers are also available.
Side-by-side comparison
Annual contribution: HTB ISA GBP 2,400 (GBP 200 a month); LISA GBP 4,000. Bonus: HTB ISA 25% capped at GBP 3,000; LISA 25% capped only by the GBP 4,000 annual contribution. Bonus timing: HTB ISA at completion; LISA monthly during saving (compounding effect).
Property cap: HTB ISA GBP 250,000 outside London or GBP 450,000 within; LISA GBP 450,000 UK-wide. Withdrawal flexibility: HTB ISA withdrawal allowed any time (without bonus) penalty-free; LISA withdrawal attracts 25% penalty unless qualifying.
Age eligibility: HTB ISA had no upper age limit when open (closed 2019); LISA 18 to 39 to open, contributions to 50. Retirement use: HTB ISA has no retirement function; LISA can be used as retirement saving from age 60.
For a first-home saver outside London with a property budget below GBP 250,000, the HTB ISA cap on bonus (GBP 3,000) becomes the binding constraint. A saver who has built up GBP 12,000 in HTB ISA has hit the bonus ceiling; continuing to contribute earns interest but no additional bonus. For these savers, transferring to LISA captures higher bonus on future contributions.
How to transfer Help to Buy ISA to LISA
Transfers are initiated through the LISA provider. The saver opens a LISA (if not already open) and completes the LISA provider's transfer form specifying the HTB ISA provider and account details. The LISA provider contacts the HTB ISA provider; funds transfer typically within 15 working days.
The transferred balance counts against the LISA annual GBP 4,000 contribution limit for the tax year of transfer. Under transitional rules running from 6 April 2017 to 5 April 2018, transfers from HTB ISA did not count against the LISA limit; this window has closed.
The transferred balance retains its HTB ISA accumulated interest history but loses HTB ISA status. The LISA bonus rules apply prospectively from the date of transfer; the transferred amount becomes eligible for the LISA 25% bonus on the next contribution-driven bonus payment, with the bonus computed on monthly contributions, not on the migrated balance directly.
Worked example: a 33-year-old has GBP 8,000 in a Help to Buy ISA built up over four years. They transfer GBP 4,000 to a LISA on 6 April 2026 (using the full year's LISA limit) and leave GBP 4,000 in the HTB ISA. They continue contributing GBP 200 a month to the HTB ISA (earning interest only, having hit the bonus cap) plus accumulating bonus on the LISA balance at the monthly bonus rate going forward.
Choosing between them for new and existing situations
New savers in 2026 cannot open a Help to Buy ISA. The choice is between LISA, a regular Cash ISA, or non-ISA savings. For first-home buyers aged 18-39 with home prices below GBP 450,000 the LISA captures the bonus advantage. Above GBP 450,000 the LISA does not work for the home purchase and other vehicles are needed.
Existing HTB ISA holders considering whether to continue or transfer face several considerations. If the saver is likely to buy a home costing more than GBP 250,000 (outside London) or GBP 450,000 (inside London) the HTB ISA cap matters. The LISA's GBP 450,000 cap is UK-wide and more useful for higher-priced areas.
The savings horizon matters. HTB ISA savers expecting to buy within 1-2 years may prefer to stay in HTB ISA - the bonus comes at completion regardless of timing, and the saver can continue accumulating contributions toward the GBP 12,000 / GBP 3,000 ceiling. Savers with 3+ year horizons get more from the LISA's monthly-compounded bonus.
Some savers run both: HTB ISA continuing GBP 200 a month, LISA used for the remaining annual ISA capacity. The combination is permitted; the HTB ISA bonus is claimed at completion for the HTB ISA portion, and the LISA is used penalty-free directly. The conveyancer handles both bonus claims at completion.
When neither scheme suits the buyer
Buyers above the LISA property cap of GBP 450,000 cannot use the LISA for the home purchase without the 25% penalty. In London and the South East where many first-home prices exceed GBP 450,000, this rules out the LISA bonus. The same buyer would also be above the HTB ISA cap of GBP 450,000 within London.
For higher-priced first homes, alternative routes include: building a deposit outside ISA structures (using PSA capacity for interest tax-free), gifts from parents using their IHT exemptions and PETs, equity loans through Help to Buy: Equity Loan (closed for new applications in October 2023 but legacy borrowers continue), and shared ownership schemes that reduce the up-front deposit requirement.
Buyers over 40 cannot open a LISA. Existing LISA holders aged 40+ continue to contribute up to age 50. For new savers over 40, the LISA route is closed; the HTB ISA is also unavailable. Alternative tax-efficient routes for these buyers include Stocks and Shares ISAs for medium-term saving, NS&I products for capped tax-free returns, and pension contributions for retirement that may be drawn at 25% tax-free from age 55 (57 from 2028).
Practical action: matching the saving structure to the buyer's age, home-price target and savings horizon matters more than picking the highest-bonus product abstractly. A 39-year-old who will buy a GBP 500,000 home in 6 months is poorly served by either HTB ISA or LISA; a 25-year-old with a 7-year saving horizon for a GBP 300,000 home is well served by the LISA.
Eligibility timing for both schemes
Help to Buy ISA timing rules apply throughout the saving life. Minimum balance for bonus claim: GBP 1,600 (produces GBP 400 minimum bonus). Bonus claim must be at home completion; cannot be claimed retroactively after purchase. Property must be in the UK with a residential mortgage; cash buyers do not qualify.
LISA timing rules require the LISA to have been open for at least 12 months before any first-home withdrawal. A LISA opened today and a home bought next month would not qualify for penalty-free withdrawal. Savers planning short-horizon home purchases need to factor in this 12-month requirement.
Both schemes require first-time buyer status: never having owned residential property anywhere in the world. A previous home buyer who has since sold and now wants to re-enter the market does not qualify; the schemes are specifically for first-time entrants.
Edge case: where two first-time buyers buy jointly, both can claim their separate bonuses on the same property purchase, provided both meet first-time buyer status and the property meets the price cap. A couple each holding LISAs can claim two GBP 4,000-a-year contribution flows plus the accumulated bonus pot of both, combined at completion.
Cash flow during the saving phase
HTB ISA pattern: GBP 200 a month for 12 months reaches GBP 2,400; bonus paid at completion. Saver sees pot grow to GBP 2,400 plus interest; bonus is invisible during saving (it appears only at completion). Visual progress is the personal savings flow.
LISA pattern: GBP 333 a month for 12 months reaches GBP 4,000 plus monthly bonus payments totalling GBP 1,000 a year. Saver sees the bonus credit each month, visible progress beyond personal contributions. The monthly visibility is psychologically motivating for many savers.
The cash flow gap matters where the saver tracks progress closely. A HTB ISA holder thinking 'I have GBP 2,400' may underestimate the effective pot; a LISA holder seeing GBP 5,000 (including bonus) has the bonus already visible.
Worked example: comparing identical net monthly outflow of GBP 333. HTB ISA constrained to GBP 200; remaining GBP 133 goes to Cash ISA. LISA at GBP 333. After 12 months: HTB ISA GBP 2,400 + bonus claim potential GBP 600 + Cash ISA GBP 1,596 = GBP 4,596 total. LISA GBP 4,000 + GBP 1,000 bonus + interest = GBP 5,000+. The LISA wins by around GBP 400 in this comparison.
Closing accounts and unused allowances
Closing a HTB ISA early (before home purchase) returns the balance plus interest to the saver. No bonus is paid because the bonus is conditional on home purchase. The saver can redeposit the funds elsewhere (a Cash ISA, regular savings, etc.) within the standard rules.
Closing a LISA early (non-qualifying withdrawal) attracts the 25% penalty on the withdrawal amount. The effective loss on original contributions is around 6.25%. The penalty applies on the full withdrawal including the government bonus, so the saver receives back somewhat less than their original contributions.
Unused LISA allowance does not carry forward. A saver who contributes only GBP 1,000 in a year cannot 'top up' to the GBP 4,000 cap in a later year using the missed capacity. The use-it-or-lose-it nature applies to the LISA cap and the wider GBP 20,000 ISA allowance.
Edge case: where a saver has contributed to both HTB ISA and LISA in the same tax year and the combined contributions exceed the GBP 20,000 ISA allowance, HMRC corrects by reducing the non-LISA contribution and notifying the saver. The saver receives the correction letter typically 6-12 months after year-end.
Disclaimer
This article provides general information based on rules and figures published by UK government and regulator sources as of May 2026. It is not personal financial, legal, immigration or tax advice. Rules, fees and figures change and individual circumstances vary. Readers should check primary sources or consult a qualified, regulated adviser before acting on any information here.
Frequently asked questions
Can I still open a Help to Buy ISA?
No. Help to Buy ISA closed to new savers on 30 November 2019. Existing holders continue to contribute up to GBP 200 a month and can claim the 25% bonus at home completion up to GBP 3,000 of bonus on a GBP 12,000 balance. The bonus claim deadline is 1 December 2030. For new first-home savers the alternatives are Lifetime ISA (if aged 18-39), Cash ISA, or non-ISA savings.
Is the LISA better than a Help to Buy ISA?
Generally yes for new savers and for HTB ISA holders with longer time horizons. LISA bonus is higher in absolute terms (uncapped except by the GBP 4,000 annual cap, versus HTB ISA cap of GBP 3,000), paid during saving so compounds, and the property cap of GBP 450,000 UK-wide is more useful in higher-priced areas than the HTB ISA's GBP 250,000 outside London. HTB ISA's advantage is flexibility: withdrawals are penalty-free without the bonus, useful where plans change.
Can I have both a Help to Buy ISA and a Lifetime ISA?
Yes you can hold both, but only one bonus can be claimed against the same home purchase. The HTB ISA bonus and LISA penalty-free withdrawal cannot both apply to the same property. Most savers continue with one as the main vehicle (LISA for longer horizons, HTB ISA for shorter) rather than splitting contributions across both. Where both are held the conveyancer claims the HTB ISA bonus on one set of funds and uses the LISA withdrawal for additional deposit.
How do I transfer Help to Buy ISA to LISA?
Open a LISA with a chosen provider and complete their HTB ISA transfer form, specifying the HTB ISA provider and account details. The LISA provider initiates the transfer; funds move typically within 15 working days. The transferred balance counts against the LISA annual GBP 4,000 contribution limit for the tax year of transfer. The HTB ISA can be partly transferred (leaving some balance) or fully transferred (closing the HTB ISA).
What if my first home is over GBP 250,000 outside London?
The Help to Buy ISA bonus cannot be claimed for properties above the regional cap (GBP 250,000 outside London, GBP 450,000 within). The LISA cap is GBP 450,000 UK-wide and more useful for higher-priced areas. Where the property exceeds both caps, the bonus cannot be claimed against the purchase; the saver can withdraw the HTB ISA balance penalty-free (but without bonus) or use the LISA with the 25% penalty on withdrawal.