Santander Lifetime ISA

Save for your first home and retirement at the same time

Investment ISAs put your capital at risk & you may get back less than you originally invested

Lifetime ISA

from Nutmeg

  • Fund Choice: A range of portfolios for your Lifetime ISA suited to your chosen risk level and investment style
  • Invest From: From £100 to £4,000.

Why we like it: Simple annual portfolio management fees of 0.45%-0.75% up to £100k. 0.25%-0.35% beyond £100k. There are some underlying fund costs and market spread charges. Easy, online setup in minutes. Start as little with £100 up to £4,000. Plus, live chat, helpful customer support and really useful investor tools & guides. Nutmeg are regulated by the FCA & are covered by the FSCS. Capital at Risk

Lifetime ISA

from AJ Bell

Regular Savings
  • Fund Choice: Over 2,000 Funds, Shares and ETF's
  • Invest From: £25 per month

Why we like it: Start from £25 pm & save up to £4,000 pa. Wide choice of stock market linked investments or utilize investment ideas. Can be retained in cash. Simple annual management fee of 0.25%. Deal from £1.50 & never pay more than £5.00 per online deal. AJ Bell are regulated by the FCA & are covered by the FSCS. AJ Bell do not offer advice. Capital at risk

Lifetime ISA

from Moneybox

  • Fund Choice: Choose between a Cash Lifetime ISA and get a competitive interest rate on top of your tax-free savings and a government bonus, or a Stocks & Shares Lifetime ISA to invest and grow your first home savings over time. Government withdrawal charge may apply
  • Invest From: £1

Why we like it: Cash Lifetime ISA: Market-leading interest rate of 4.4% AER (variable) which includes a 3.5% base rate (variable) and a fixed one year bonus interest rate of 0.90%. Stocks and Shares Lifetime ISA: Three starting options: Cautious, Balanced or Adventurous. Earn 3% AER variable on any uninvested cash you hold within Stocks and Shares Lifetime ISA. Use handy Deposit Calculator to work out how much you need to save, and how long it’ll take you to achieve your deposit goal. Useful Jargon-busting First Time Buyer guides. Must be UK resident aged 18-39. If you need to access your money for any other reason than your first home or retirement, you’ll pay the Government penalty

Lifetime ISA

from Hargreaves Lansdown

Regular Savings
  • Fund Choice: Over 3,000 Funds, Investment Trusts, Bonds, ETF's or Cash
  • Invest From: £100 single or £25 per month

Why we like it: Easy to setup in a matter of minutes. Start with as little as £25 pm & save up to £4,000 pa. Wide choice of stock market linked investments, or can be retained in cash. Simple annual platform fee of 0.45%. Other charges may apply. Hargreaves Lansdown are regulated by the FCA and are covered by the FSCS. Capital at Risk

Please be aware we are not currently able to offer any Lifetime ISAs from Santander.

Who are Santander?

Santander are one of the UK’s largest retail and commercial banks. They are a household brand in the UK and still operate a large number of high-street branches across the country offering a face-to-face service.

They provide many financial products and services for personal and commercial banking, including ISA accounts for individual savers.

At the current time, Santander do not offer a Lifetime ISA product.

What is a Lifetime ISA?

A Lifetime ISA (LISA) is an investment product designed by the government to incentivise people under 40 to save for a first house deposit.

HMRC adds 25% to everything you put into your Lifetime ISA.

For example, if you contribute up to the annual LISA limit of £4,000, HMRC tops this up 25% to £5,000 for free.

What are the advantages of a Lifetime ISA?

ISA stands for Individual Savings Account, and all ISAs are tax-efficient by nature.

In a LISA, or any other type of ISA, you don’t have to pay:

  1. Capital Gains Tax on the growth of your investments
  2. Income tax on the interest you earn
  3. Income tax on dividends you receive

In addition to the tax benefits, Lifetime ISAs also benefit from the following features:

  1. You can invest in either a Cash LISA with fixed or variable interest rates, or a Stocks and Shares LISA which gives you access to the entire stock market.
  2. You can save up to £4,000 per year, and get a free £1,000 each year from HMRC.
  3. You can put both your and your partner’s Lifetime ISA savings towards the same house deposit as long as it’s your first home.
  4. You can withdraw your funds free of charge at age 60 if you don’t end up using them for a house deposit.

What are the disadvantages of a Lifetime ISA?

The primary drawback of Lifetime ISAs is the charge you pay for withdrawing if it’s not for a first house deposit or at age 60.

The government charges 25% on withdrawals that don’t fit into the above criteria.

This charge is greater than the bonus you originally get from HMRC because of the way percentages work.

We demonstrate this in the example below.

How your Lifetime ISA’s unsolicited withdrawal charge outweighs the 25% government bonus


  • You contribute £4,000 to a Lifetime ISA.
  • HMRC adds 25% of £4,000, which is £1,000, bringing your total amount invested to £5,000.
  • You then withdraw your full £5,000.
  • HMRC charges 25% of your withdrawal, which is £1,250, leaving you with just £3,750 to withdraw.
  • This comes to £250 less than you originally invested, representing a -6.25% loss.

What type of house can I buy with a Lifetime ISA?

Before investing in a Lifetime ISA it’s important to review what types of house purchases qualify for LISA funds.

You don’t want to invest in a LISA and it not be eligible for your property purchase as you’ll then have to wait until age 60 before you can withdraw your money free of charge.

Lifetime ISA property rules:

  • The property must be the first home you’ve bought
  • You must live in the property – it can’t be a buy to let
  • The property must be valued at £450,000 or under
  • You must be buying with a mortgage and not purchasing the home outright with cash
  • You must have held your Lifetime ISA for at least 12 months before cashing in

Can you transfer a normal ISA into a Lifetime ISA?

You can benefit from the 25% government bonus on your existing ISAs by transferring them into a Lifetime ISA.

You just need to complete at Lifetime ISA transfer form with your LISA provider, and they will administer the transfer on your behalf.

You’ll only be able to transfer up to £4,000 of ISAs to a Lifetime ISA per tax year as your transfers count towards your annual LISA allowance.

How do I open a Lifetime ISA?

To open a Lifetime ISA account:

  • Go to your chosen Lifetime ISA provider’s website
  • Follow the instructions to create an account
  • Have your National Insurance Number to hand
  • Use your debit card to make a lump sum contribution or bank details to set up a Direct Debit

You must also be between the ages of 18-39, and be a UK resident.

You can also open a LISA account over the telephone or with a postal application form. 

Frequently Asked Questions

What is the Lifetime ISA annual allowance?

£4,000 for the 2022/23 tax year.

Are LISAs tax efficient?

Yes, any dividends, capital gains or withdrawals will be 100% tax-free from a LISA.

Can I contribute to a Lifetime ISA if I have already used my full £20,000 ISA allowance?

No. Your Lifetime ISA allowance counts towards your total annual allowance, so if you have contributed £4,000 to a LISA then you can only contribute a further £16,000 to a standard ISA.

Can I have a Lifetime ISA and a standard ISA?

Yes, you can open a LISA if you already have a Cash ISA or Stocks and Shares ISA.

Can I open a Lifetime ISA at any age?

No, you must be between the ages of 18 and 39 to open a Lifetime ISA.

Can I lose money in a Lifetime ISA?

You will be charged more than the bonus you get if you make a withdrawal against the permitted LISA rules. This is because 25% of your withdrawal after the added government bonus will total more than 25% of your original contribution.

You can also lose money in a Stocks and Shares LISA if your investments fall in value.

Can I open a Lifetime ISA at any age?

No, you must be between the ages of 18 and 39 to open a Lifetime ISA.

Can I split my LISA for use between my first home and retirement?

Yes, if you do not use all of your LISA value for your first home, then you can take the remainder at age 60 without being charged.

Can I transfer my LISA to a normal ISA?

You cannot transfer a Lifetime ISA to a standard ISA as this would be a way of avoiding the 25% charge for unsolicited withdrawals.

What happens to my LISA when I die?

If you still hold your LISA when you die, it will form part of your estate and be liable to Inheritance Tax (IHT) just like any other investment.