Lifetime ISA Rules: Age, £4,000 Limit and Withdrawals

A Lifetime ISA lets an eligible person pay in up to £4,000 each tax year and receive a 25% government bonus, up to £1,000. The £4,000 counts within the overall £20,000 ISA allowance for 2026/27. The account has strict access rules, so the bonus should not be considered separately from the potential 25% withdrawal charge.

You must normally be UK-resident, at least 18 and under 40 when you open the account and make its first payment. You can continue contributing until your 50th birthday. Charge-free withdrawals are mainly for a qualifying first-home purchase, from age 60, or after a terminal-illness diagnosis with less than 12 months to live.

Lifetime ISA rules at a glance

Rule	Current position for 2026/27
Age to open	18 or over and under 40 when applying and making the first payment
Contribution limit	£4,000 per tax year, counted within the £20,000 overall ISA allowance
Government bonus	25% of eligible contributions, up to £1,000 per tax year
How long you can contribute	Until your 50th birthday; the account can stay open afterwards
How many you can fund	You may hold more than one over your lifetime, but normally pay into only one Lifetime ISA in a tax year
First-home price limit	£450,000 or less, anywhere in the UK
Waiting period	At least 12 months from the first payment before a qualifying home withdrawal
Other withdrawals	Usually a 25% charge on the amount withdrawn

The tax year runs from 6 April to 5 April. The government bonus does not itself use more of your ISA allowance: paying £4,000 into a Lifetime ISA leaves £16,000 of the 2026/27 allowance for other ISA contributions, assuming you have paid nothing else into an ISA that year.

How much can you put in a Lifetime ISA?

The maximum new contribution is £4,000 per tax year. You can contribute monthly, in several payments or as a lump sum, subject to the provider's terms. A full £4,000 contribution can earn a £1,000 bonus. A £2,000 contribution can earn £500. The calculator above applies those rules without projecting investment returns.

The £4,000 limit is not additional to the adult ISA allowance. For example, £4,000 into a Lifetime ISA plus £16,000 across other adult ISAs would use the full £20,000 allowance for 2026/27. Transfers from another Lifetime ISA do not normally use a fresh contribution allowance when the provider completes the official ISA transfer process.

Minimum and maximum age rules

You must be 18 or over and under 40 to open a Lifetime ISA and make the first payment. In ordinary cases, this means opening and funding it no later than the day before your 40th birthday. Opening an empty account is not enough for the first-home clock: GOV.UK describes the 12-month period as starting when the first payment is made.

Once the account has been validly opened, contributions can continue until your 50th birthday. At 50, new personal contributions and new government bonuses stop. The account does not have to close; cash can continue earning interest and investments can continue rising or falling.

The qualifying first-home route

A charge-free first-home withdrawal must satisfy all of the main conditions below:

• the residential property costs £450,000 or less;
• the purchase takes place at least 12 months after the first Lifetime ISA payment;
• the money is paid by the provider to the conveyancer or solicitor acting in the purchase;
• the purchase uses a mortgage or another qualifying regulated home-purchase plan; and
• the buyer intends to occupy the property as their main residence rather than let it or use it as a holiday home.

The home must be in the UK. HMRC's manager guidance says a houseboat, buying land to build on, or a property intended for letting does not qualify in the same way. The legal owner must sign the appropriate declaration through the conveyancer. Do not withdraw the money personally to pay a deposit: use the provider's formal first-home process.

Buying with another person

Two buyers can each use a Lifetime ISA towards the same purchase if each person is a first-time buyer and each account and purchase meets the conditions. If the other buyer has owned property before, an eligible first-time buyer can still use their own Lifetime ISA towards their share of a qualifying joint purchase.

The £450,000 ceiling applies to the whole property's purchase price, not to each buyer's share. Two Lifetime ISAs do not raise it to £900,000.

What the 25% withdrawal charge actually does

The charge is 25% of the amount withdrawn, including the bonus and any growth included in that withdrawal. It therefore removes the bonus and some of the original contribution when values have not changed.

For example, pay in £4,000 and the 25% bonus makes £5,000. A non-qualifying withdrawal of the whole £5,000 produces a £1,250 charge and returns £3,750. Ignoring interest, investment movement and fees, that is £250 less than the original £4,000 contribution—a 6.25% reduction.

The result can differ after interest, gains, losses or fees because the charge applies to the amount withdrawn at that time. Investment values can fall as well as rise, independently of the government charge.

When there is no withdrawal charge

For an individual saver, the best-known charge-free routes are:

• a qualifying first residential purchase;
• withdrawal from age 60;
• terminal illness where life expectancy is less than 12 months; and
• death, when the account ends and the withdrawal charge does not apply.

HMRC's operational guidance lists a few additional administrative exceptions, such as correcting an invalid account or a provider failure. They are not a general way for a saver to access the account early.

Cash Lifetime ISA or stocks and shares Lifetime ISA?

A Lifetime ISA can hold cash, investments, or a combination if the provider supports it. This is a risk decision, not a way around the access rules.

• Cash: the account balance does not move with markets, although the interest rate and inflation still matter. This can avoid market-loss risk for a near-term house purchase.
• Stocks and shares: investments can rise or fall and may be worth less when the purchase is due. MoneyHelper says investing is generally for money that can remain invested for years and for someone able to accept losses.

A first-home buyer with a fixed date and no ability to delay may reach a different conclusion from someone saving for retirement decades away. Check the provider's charges, interest rate or investment range, transfer policy and Financial Conduct Authority permissions. FCA authorisation does not prevent normal investment losses.

Moving abroad

If you become non-UK resident, you normally cannot make new ISA contributions, including to a Lifetime ISA. The main GOV.UK exception is for a Crown employee working overseas, or their spouse or civil partner. The account can remain open and retain its UK tax advantages, and contributions can resume if you return and become UK-resident, subject to the rules then in force.

Transfers and switching provider

Use the new provider's official ISA transfer process. Withdrawing the money yourself and paying it into another account can trigger a Lifetime ISA withdrawal charge and may also use contribution allowance. Check whether the receiving provider accepts the account type, cash or investments you hold, and any transfer fees or time out of the market.

Lifetime ISA and Help to Buy ISA

You can hold both, but GOV.UK says you can use the government bonus from only one of them for the same first-home purchase. Existing Help to Buy ISA holders can continue contributing under that scheme's timetable, but new Help to Buy ISAs cannot be opened. A transfer from a Help to Buy ISA into a Lifetime ISA counts towards the annual Lifetime ISA limit under HMRC's current guidance.

A checklist before opening or contributing

1. Confirm that you meet the age and UK-residence rules.
2. Decide whether the money is genuinely for a qualifying first home or access from age 60.
3. Keep emergency money outside the Lifetime ISA.
4. For a first home, test the £450,000 cap and 12-month rule against a realistic purchase plan.
5. Choose cash or investments based on timeframe and ability to accept a fall—not on the bonus alone.
6. Compare interest, investment options, platform and fund charges, transfers and service.
7. Check the provider independently on the FCA Register and read its current terms.
8. Use the conveyancer and provider process for a home withdrawal.

Sources checked

• GOV.UK: Lifetime ISA overview, contribution limit and bonus
• GOV.UK: qualifying withdrawals, first-home conditions and charge examples
• GOV.UK: 2026/27 ISA allowance and one-Lifetime-ISA payment rule
• GOV.UK: ISA rules after moving abroad
• HMRC: detailed first-time residential purchase conditions
• MoneyHelper: ISA types, contribution limits and saving-versus-investing context

Reviewed 28 September 2026. Rules, allowances and provider terms can change. This is general education, not personal financial, investment, mortgage or tax advice. Investment values can fall and you may get back less than you put in.