First-Time Buyer ISA consultation: what it means for Lifetime ISAs
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The government opened consultation on a new First-Time Buyer ISA that could eventually replace the Lifetime ISA for new savers. Existing LISAs continue unchanged.
By Money Guide editorial team
Published:
The Treasury published consultation proposals for a First-Time Buyer ISA — a successor product aimed at first-time buyers that would replace new Lifetime ISA subscriptions once implemented, likely from 2027.
Existing Lifetime ISAs are unaffected: money already saved keeps the 25% government bonus rules, the £450,000 property price cap and the current withdrawal penalties. You can still open a LISA today if you are aged 18–39 and have not owned a home.
The consultation follows long-running criticism that the LISA's £450,000 property limit — frozen since 2017 — prices out buyers in parts of the South East, and that withdrawing to buy a home above the cap triggers an effective 6.25% penalty on the whole pot.
Cash LISA rates have risen sharply in 2026, with top easy-access deals paying around 5%–5.8% plus the 25% bonus on up to £4,000 a year. Even if you will not buy for several years, opening a LISA with £1 now starts the 12-month clock required before using the bonus on a purchase.
Read the consultation on gov.uk and check whether a property you might buy would fall within current LISA limits before committing large sums.