A Lifetime ISA is a UK savings account you can use towards your first home or for later life, and the government adds a bonus to what you pay in.
A Lifetime ISA, or LISA, is a type of Individual Savings Account. It can hold cash, stocks and shares, or a mix of both.
It was launched in 2017. ISAs are a UK tax product run under HMRC rules, so the same Lifetime ISA rules apply in Scotland as in the rest of the UK.
Who can open a Lifetime ISA?
You can open one from age 18 until your 40th birthday, and your first payment has to go in before you turn 40.
To open one and keep paying in, you must be UK resident. Members of the armed forces and Crown servants living abroad, and their spouses or civil partners, can also open one and pay in.
How much can I pay in, and how big is the bonus?
You can pay in up to £4,000 each year until you are 50. The government bonus is 25% of what you pay in, so the most you can get is £1,000 a year.
The money you pay into a Lifetime ISA counts towards your overall ISA allowance, which is £20,000 in the 2026 to 2027 tax year.
When you turn 50, you can no longer pay in or get the bonus. The account stays open and keeps earning interest or investment returns.
Can I use a Lifetime ISA to buy a home in Scotland?
Yes. HMRC guidance says Lifetime ISA money can go towards a first home anywhere in the UK.
To use it without a charge, the home must cost £450,000 or less. This limit is the same across the UK, and on 28 October 2026 HM Treasury said it will keep the limit at £450,000 rather than raise it, link it to prices or set different limits for different areas.
For comparison, the ONS reports a provisional average house price in Scotland of £198,000 in August 2026. That figure covers all buyers, not only people buying their first home.
Your first payment into the Lifetime ISA must have gone in at least 12 months before you buy. You must also buy with a mortgage, and you must intend to live in the home as your only or main home.
Since 6 April 2024, you cannot use your Lifetime ISA without a charge if the mortgage comes from a connected person, such as a relative or your spouse or civil partner. Using it to buy a home to let out or to use as a holiday home also brings a withdrawal charge.
Can I use a Lifetime ISA if I buy with someone else?
Yes. If you each have a Lifetime ISA, you can each put your savings and bonus towards the home, as long as you are both first-time buyers and meet all the conditions.
HMRC guidance says you can also use your Lifetime ISA when you buy with someone who is not a first-time buyer.
How does the money reach my solicitor?
A solicitor or conveyancer must act for you, and your Lifetime ISA provider pays the money directly to them. You cannot act as your own conveyancer for this.
In Scotland, HMRC counts a solicitor, an advocate or a conveyancing practitioner as an eligible conveyancer.
Before the withdrawal, you give your conveyancer a signed declaration. It includes details such as the purchase price and the address of the property.
The provider should pay the money to your conveyancer within 30 days of receiving all the information and declarations.
What happens if my purchase is delayed or falls through?
The purchase should normally complete within 90 days of the money leaving your Lifetime ISA. If it is still going ahead but needs longer, your conveyancer can ask for a 60-day extension and then a further 30-day extension.
If the purchase falls through or does not complete in time, your conveyancer must pay the money back in full into your Lifetime ISA.
What does it cost to take money out for another reason?
You can take money out without a charge to buy your first home, once you are 60, or if you have a terminal illness and are expected to live less than 12 months.
Any other withdrawal carries a 25% charge. From 29 October 2026 there is one exception, for first homes over £450,000, explained below. Moving a Lifetime ISA into another type of ISA before you are 60 also carries the 25% charge.
The charge takes back more than the bonus. In a GOV.UK example, £800 of savings plus a £200 bonus makes £1,000, and taking it all out for another reason costs £250, which leaves you with £750.
In a June 2026 consultation, HM Treasury said more Lifetime ISA holders had lost some of the money they paid in than had used the account to buy a home.
What if my first home costs more than £450,000?
From 29 October 2026, a lower charge applies in this case, under new regulations laid before Parliament on 28 October 2026. If you take money out to buy a first home that costs more than £450,000, and the purchase meets all the other rules, the charge is 20% instead of 25%.
HM Treasury says the 20% charge takes back the government bonus but lets you keep the money you paid in.
Can I have a Lifetime ISA and a Help to Buy ISA?
Yes, but only one of the two government bonuses can go towards your first home.
You can move money from a Help to Buy ISA into a Lifetime ISA. Moving money the other way, from a Lifetime ISA into a Help to Buy ISA, brings the 25% charge.
Is the Lifetime ISA being replaced?
Yes, for new savers. At the UK Budget on 28 October 2026, the government said a new First Time Buyer ISA will be introduced from April 2029 and will replace the Lifetime ISA for new savers.
If you already have a Lifetime ISA, you can keep paying in and using it under the current rules. You can still open a new Lifetime ISA until the switch in April 2029, and accounts opened before then carry on under the existing rules.
The First Time Buyer ISA is confirmed government policy but is not yet law. Under the plans, it has no withdrawal charge. When you take the money out for a first home, the government will add a 25% bonus worked out on your final balance. The most bonus you can get in total is £20,000. This cap on the bonus is separate from the £20,000 yearly ISA allowance.
You will be able to pay in up to £4,000 a year, and the £450,000 price limit will also apply. It will be open to people aged 18 and over, with no upper age limit.
You will not be able to move Lifetime ISA money into a First Time Buyer ISA, but you will be able to use both accounts towards the same home.
HM Treasury says that in each tax year you will be able to pay into a Lifetime ISA or a First Time Buyer ISA, but not both.