If you opened a Help to Buy ISA before they closed to new applicants in November 2019, you have a decision to make. You can keep contributing until 30 November 2029 and claim your bonus by 1 December 2030, or you can move some or all of that pot to a Lifetime ISA and access the LISA's more generous bonus going forward. This isn't a one-size-fits-all decision. Here's what each ISA does, the head-to-head numbers, and how to decide.
The bottom line first
If you're a Help to Buy ISA holder and planning to buy in the next year or two, keep going, the bonus mechanics aren't worth disrupting that close to purchase. If you're a Help to Buy ISA holder and won't buy for 3+ years, opening a Lifetime ISA alongside (rather than instead) gives you the best of both. For most existing HtB ISA holders, switching wholesale isn't the answer, running both in parallel is.
How the Help to Buy ISA works
Quick refresher:
- Closed to new applicants: 30 November 2019.
- Existing holders save until: 30 November 2029.
- Bonus claim deadline: 1 December 2030.
- Monthly contribution limit: £200 per month (£1,200 first month allowed).
- Bonus rate: 25% of savings, max £3,000 (on £12,000 saved).
- Property price cap: £450,000 in London, £250,000 elsewhere.
- Minimum to claim bonus: £1,600 saved.
- Bonus timing: Paid at completion via your solicitor, NOT towards your deposit (that catches buyers out, see below).
How the Lifetime ISA works
And the LISA:
- Open to: UK residents aged 18-39 (must open before 40).
- Annual contribution limit: £4,000 per year.
- Bonus rate: 25% of contributions, max £1,000/year.
- Total possible bonus: £33,000 if you max it from age 18 to 50.
- Property price cap: £450,000 anywhere in the UK.
- Access: first home (after 12 months holding the account), or retirement from age 60.
- Other withdrawals: 25% government penalty (effectively a 6.25% loss on your contributions plus the bonus).
Head-to-head: contribution limits and total bonus
The biggest practical difference: how much bonus you can actually earn each year, and how much in total.
- HtB ISA: Max £200/month = £2,400/year contributions = £600/year bonus. Lifetime cap: £3,000 bonus.
- LISA: Max £4,000/year contributions = £1,000/year bonus. Lifetime cap (until retirement): £33,000 bonus.
- Verdict: LISA has much higher annual and lifetime bonus potential.
The big catch with the Help to Buy ISA bonus
Here's the gotcha many HtB ISA holders learn too late: the HtB ISA bonus is paid at completion, not at exchange or deposit. So you can't use it towards your initial 5-10% deposit. Your solicitor claims it from HMRC and it lands as a credit against the purchase price at completion. Practical effect: you need to have your full deposit cash AND a separate HtB ISA balance, with the bonus arriving at the end.
By contrast, the LISA bonus is added monthly to your LISA balance, so by the time you withdraw for purchase, the bonus is already in the pot, usable as part of your deposit at exchange.
The property price cap difference
Help to Buy ISA: £250,000 outside London, £450,000 in London. Lifetime ISA: £450,000 anywhere.
If you're buying outside London for £280,000, the HtB ISA bonus is forfeited, you don't qualify. The LISA bonus still pays out. Worth thinking about based on your target area.
What the Autumn 2025 Budget changed
The November 2025 Budget confirmed the government will consult on replacing the Lifetime ISA with a new, simpler first-time buyer savings product. The consultation outcomes haven't yet been turned into legislation as of mid-2026, but it suggests the LISA's days in its current form may be numbered.
Implications for now: existing LISAs continue, and new LISAs can still be opened until any replacement is announced. Don't let consultation news talk you out of using a LISA today if it suits, but keep an eye on Budget announcements over the next 12-18 months.
Can you have both?
Yes. You can hold an HtB ISA AND a LISA at the same time, contributing to both. But the catch: when you buy your first home, you can only use ONE of the schemes' bonuses towards that purchase. The other forfeits the bonus on withdrawal.
Most people who hold both end up using the LISA bonus (higher amount, paid into the pot early enough to use as deposit) and withdrawing the HtB ISA balance without claiming the bonus, losing 25% of the amount they would otherwise have got. Worth knowing before you fill both.
Decision framework
Quick decision tree for HtB ISA holders:
- Buying in the next 12 months? Keep the HtB ISA, claim the bonus, move on.
- Buying in 2-3 years? Open a LISA alongside, contribute up to £4k/year, keep contributing to HtB ISA at £200/month. Use the LISA bonus at purchase, withdraw HtB ISA balance.
- Buying in 5+ years and not over 40 yet? Lean more into LISA, open one if you haven't, max it where possible, let HtB ISA keep ticking but don't worry about which bonus you'll use.
- Already over 40 or not first-time buyer? LISA isn't open to you. Stick with the HtB ISA and use what's there.
If you're sitting on a Help to Buy ISA you opened years ago and a LISA you keep meaning to open, the simplest answer is usually: open both, run them in parallel, choose the LISA bonus at purchase. The bigger picture conversation, how much to save, where to buy, what mortgage you'd qualify for, is where a chat with Debbie at DS Financial can help you join the dots. Our full LISA guide goes deeper on the LISA mechanics if you want more detail.
General information, not financial advice. Your home may be repossessed if you do not keep up repayments on your mortgage.
Sources: MoneyHelper, Help to Buy ISAs, MoneyHelper, Lifetime ISA, Autumn 2025 Budget, LISA consultation.
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