How to open a Lifetime ISA

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 just £1 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, our LISA app is also award-winning, and trusted by over 350,000 first-time buyers. 

Download our app today to start saving for your first home with a 25% boost from the government. As if that wasn’t enough, you’ll also get our market-leading 4.75% AER (variable) interest rate with our Cash Lifetime ISA.

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 you have a place to keep and grow your deposit, you’ll also get support and encouragement every step of the way. We’ll show you how long it’ll take you to buy your first home, as well as tips and guidance on how to reach your goal sooner. As we also specialise in helping first-time buyers get on the ladder sooner, when it comes to getting a mortgage we can help you too. 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.

Learn more: What is mortgage affordability? 

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?

It’s only too late to open a Lifetime ISA if you’re over the age of 40, are not a first-time buyer and want to buy your first home, or are likely to buy a home in the next 12 months. 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.

Something else to think about is the price of the property you want to buy, since you can only use the Lifetime ISA to buy a home worth £450,000 or less. If you’re unable to find a home you want within the LISA budget, a high-interest savings account will offer more flexibility. 

Don’t forget to consider how property prices could change over the next 12 months. On average, house prices across the UK fell by 0.8% in the year to December 2023. This often happens when interest rates rise and mortgages become more expensive, as this dampens market demand.

However, there’s no guarantee that property prices will continue to fall. If you’re looking at properties today worth roughly £400,000, some of them might be priced above the £450,000 LISA limit once you’re finally in a position to buy. 

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 LISA 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. 

You might also like: How can a parent help a child buy a home?

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 a ISA?

Yes, you can open a Lifetime ISA and ISA. Every adult has a total annual ISA allowance of £20,000. You can only put £4,000 a year in your Lifetime ISA, so if you max that out, you could spread up to £16,000 a year across other types of ISA. 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.