How to open a Lifetime ISA
Lucy WilmottOn average, it takes first-time buyers 10 years to save up for a home. Opening a Lifetime ISA is a no-brainer when it comes to speeding up saving for your first home. A Lifetime ISA (LISA) lets you save up to £4,000 each tax year towards your first home or retirement, with the government topping up your savings with a 25% bonus.
Max out the account and you’ll get a free £1,000 boost each year. If you’re trying to get on the property ladder, read on to find out how to get a Lifetime ISA and reach your savings goals sooner.
Withdrawals from a Lifetime ISA for any purpose other than buying a first home (up to a value of £450,000) or for retirement (60+) incur a 25% government penalty, meaning you may get back less than you paid in.
Key takeaways
- Eligibility: Applicants must be aged 18–39 to open a Lifetime ISA (LISA).
- Government bonus: Receive a 25% bonus on savings up to £4,000 each tax year (max £1,000 free per year).
- The 12-month rule: The account must be open for at least 12 months before the funds can be used for a home deposit.
- Property limit: The bonus can only be used for a first home worth £450,000 or less.
Retirement option: If not used for a home, funds can be accessed tax-free after age 60.
Save with the market-leading Cash Lifetime ISA
Save up to £4,000 each tax year and get a free 25% bonus on top of your savings, up to £1,000. Plus, with the Tembo Cash Lifetime ISA, you'll earn 3.8% AER (variable) on your savings - that's hundreds more in interest towards your house fund vs saving with the closest competitor!
Who can open a Lifetime ISA?
You can open a Lifetime ISA if you’re aged 18-30, but you can only use the government’s bonus to buy a property if you’re a first-time buyer and you’re purchasing a home worth £450,000 or less.
You need to have your LISA open for a full year before you can withdraw the money to use towards your first home. So if you’re a first-time buyer but you’re not sure how soon you’ll be able to get a mortgage, it can be a good idea to open a Lifetime ISA sooner rather than later just to start the clock. You can always add the minimum deposit for now and contribute more later.
If you’re not a first-time buyer or your dream home costs more than the £450,000 limit, you could use the Lifetime ISA to save for retirement instead. If you’re employed, your workplace pension will usually be more rewarding than a LISA, since your employer will contribute to your nest egg too. LISAs can be ideal if you’re self-employed or you don’t have access to a workplace pension.
Learn more: What is a Lifetime ISA?
How to get a Lifetime ISA
You can get a Lifetime ISA in minutes by simply opening an account with your chosen provider. Some providers let you open and manage your LISA via an app instead of an online account - and we’re one of them. As well as having the market-leading Lifetime ISA interest rate, as a Tembo saver, you'll also get fee-free access to our award-winning mortgage service* when you're ready to buy, backed by our Best Mortgage Deal Guarantee.Find out more here.
Can I open a Lifetime ISA with any bank?
No, not all banks offer Lifetime ISAs, but there are plenty of options to choose from, including some high-street banks as well as providers who specialise in Lifetime ISAs - like the Tembo Lifetime ISA.
With a Tembo Lifetime ISA., not only will your savings earn the 25% government bonus and our market-leading interest rates, but you'll also have fee-free access to our award-winning mortgage service*. We've helped thousands discover their best mortgage options from +100 lenders across the market. We are also specialists in helping first-time buyers get on the ladder sooner; in fact, on average, our customers boost their mortgage affordability by an average of £82,000. From your first £1 saved to getting your keys to your new home, we’ll be by your side.Get started here
Learn more:Best first-time buyer mortgages
Can I open a Lifetime ISA online?
Yes, you can open a Lifetime ISA online. There’s no need to visit your local bank or send off countless documents. Most providers let you open a LISA on their website or via an app.
You can open a Lifetime ISA with Tembo in minutes. It all starts with downloading our award-winning app.
Is it too late to open a Lifetime ISA?
While the government has announced that the Lifetime ISA will be replaced with a new first-time buyer ISA in April 2028, there’s nothing stopping eligible savers from opening a new Lifetime ISA before any replacement product launches.
It’s only too late to open a Lifetime ISA if any of the following apply:
- You are aged 40 or over.
- You are not a first-time buyer (unless saving for retirement).
- You plan to buy a home within the next 12 months (due to the 12-month account age rule).
- You're planning on buying a home worth over £450,000
If none of these apply to you, it’s worth opening a Lifetime ISA today, so you can start saving up for your first home and benefit from your savings growing from interest over time, as well as the free 25% government bonus. Get started here
If you aren't eligible for a Lifetime ISA, consider other types of ISAs to help grow your savings. Explore our range of competitive savings accounts here.
Living in an expensive area and struggling to afford a home? A shared ownership mortgage or guarantor mortgage could make it easier to get your foot in the door. Here’s our full breakdown of alternative ways to get on the ladder.
Can I open a LISA for my child?
Unfortunately, you can’t open a Lifetime ISA for your child because they’re only available to those aged 18-39. However, if your child is within this age bracket, they can open a LISA themselves and you can contribute to it.
With a Tembo Lifetime ISA, your child can share their account details with the whole family in seconds. Our Gift Link feature lets parents, grandparents, aunties and uncles all chip in and help them get on the property ladder sooner. Find out more here.
You might also like: How can a parent help a child buy a home?
Wondering how you can help your child buy?
At Tembo, we are specialists in family-assisted mortgages and schemes. Discover how you could help turn your child’s homeownership dreams into a reality today.
Learn more: What are the benefits of an early inheritance for first-time buyers?
Can I have two Lifetime ISAs?
Yes, you can have two Lifetime ISAs - in fact, you can have as many LISAs as you like. But you can only pay into one Lifetime ISA each tax year and get the bonus from one towards your home.
If you’d like to open a Tembo Lifetime ISA but you’ve already paid into a LISA in the current tax year, you can transfer your original LISA to us. To get started, all you have to do is download our app and sign up in a couple of minutes.
Can I have a Lifetime ISA and an ISA?
Yes, you can open a Lifetime ISA and ISA. Your annual £20,000 ISA limit applies to all your ISA accounts, including the £4,000 you can put into a Lifetime ISA. So you could save £4,000 into your Lifetime ISA each tax year, and spread your remaining £20,000 across Cash ISAs, Fixed Rate ISAs and Stocks & Shares ISAs.
A Cash ISA (not to be confused with a Cash LISA) may be suitable for saving a deposit, but you won’t get the 25% government bonus - only tax-free interest.
If you’d like to invest, a Stocks and Shares ISA or Innovative Finance ISA may be suitable, but approach these with caution if you’ll need the money in the next 3-5 years. The money you invest can go down as well as up, so these types of ISA may be unsuitable for your house deposit.
Open a Tembo Lifetime ISA today
Start saving with the market-leading Lifetime ISA, and benefit from award-winning mortgage advice when you’re ready to buy with the UK’s Best Mortgage Broker.
