At 18, my parents sat me down and told me to open a Help to Buy ISA. So I did. Twelve years, countless paydays, and a lot of discipline later, it’s full. £12,000 saved, with a £3,000 government bonus waiting for me to put towards buying my first home.
There’s just one problem. I’m never going to see that bonus.
Why? Because life got in the way (in the best possible way)
My partner proposed! And last year, he bought a home for us to live in – a beautiful house worth over £250,000, which is the Help to Buy ISA property limit. So when we eventually buy our forever home together, it’ll be worth more than that. Which means: no bonus. £3,000 gone. After twelve years of doing everything right.
I felt disappointed. But then I found a Financielle blog about Lifetime ISAs (AKA LISAs.)
Here’s my plan.
I’m withdrawing my £12,000 (which to be honest is scaring me!) from the Help to Buy ISA and doing this instead:
- Open a LISA before 5th April
- Add £4,000 → get a £1,000 government bonus
- Add another £4,000 after 6th April (hello, new tax year)
- Get another £1,000 government bonus
- Put the rest in a high-interest savings account
That’s £2,000 in free government money. In roughly two weeks.
So what actually is a LISA?
A Lifetime ISA is a savings account designed for first-time buyers (and retirement). The government tops up everything you put in by 25%, on up to £4,000 a year. That means up to £1,000 extra, every single year, just for saving.
Unlike my Help to Buy ISA, a LISA has a property limit of £450,000, which gives me a lot more flexibility for when we find our forever home.
The bits worth knowing
Your LISA needs to have been open for at least 12 months before you can use it towards a house purchase, so the time to open one is now, not later.
And if you withdraw the money for anything other than a first home or retirement, you’ll pay a withdrawal penalty. So once it’s in, it stays in. Treat it like it doesn’t exist until you’re buying.
Twelve years of doing what I was told, and it turns out the plan just needed a small redirect. I’m obviously still glad that I saved! If you’ve got a Help to Buy ISA sitting there that you can’t use, it’s worth checking whether a LISA could work harder for you.
Free money, baby.
