Best Lifetime ISA providers in the UK
If you’re a first-time buyer, opening a Lifetime ISA could help you reach your savings goals faster. You can save up to £4,000 a year in it and the government will top it up by 25% — that’s a bonus of up to £1,000 a year. But which provider do you choose to go with? Keep reading to find out the best Lifetime ISA providers in the UK below.
Open a Tembo Lifetime ISA today
Download the Tembo Lifetime ISA app to start saving towards your first home. We'll show you your time to buy, and handy tips to help you get there sooner.
Best Lifetime ISA providers - Cash LISAs
If you’re planning to use your Lifetime ISA for your first home, a cash LISA is probably your safest bet. When you’ve found your dream home and you’re ready to make an offer, your money will be ready and waiting for you. Whereas, if you were to invest your deposit in a stocks and shares LISA, there’s no guarantee you’ll get back what you put in.
It’s worth noting that while Cash LISAs carry far less risk than investment LISAs, they aren’t completely risk-free. If your LISA provider was to go bust, the Financial Services Compensation Scheme would protect you for up to £85,000 per institution. If you had more than this amount in there, the additional savings could be lost if the bank collapsed.
Need to know
You must have your Lifetime ISA open for at least 12 months before you can withdraw your funds
Here are the top cash Lifetime ISA providers in the UK to choose from:
1. Tembo Lifetime ISA
Okay, we're a little biased here. But hear us out.
With our award-winning Tembo Lifetime ISA app, you can save and invest for your future home all from your phone. Once you've signed up, you choose to save your money as cash, or invest it into stocks and shares. We'll also show you your time to buy, as well as tips and guidance to reduce that timeframe - all from AI-driven insights into your spending and smart mortgage solutions that boost your affordability by an average of £82,000.
Our Stocks & Shares Lifetime ISA is a good option for those who are not looking to buy in the next five years. Keep in mind that your investments can go down as well as up.
Tembo Plus members also benefit from other perks, from free mortgage advice when it comes to applying for a mortgage to free home valuation & survey reports to help you scout out properties and make an informed offer.
What’s the interest rate? 4.3% (AER variable).
How do you open an account? App
How do you manage your account? App
When is the interest paid? Monthly
Can you transfer from other ISAs? Yes
Discover your buying budget with Tembo
Create a Tembo recommendation to see how much you could afford, including specialist buying schemes which help boost your budget. It's completely free, takes 10 minutes to complete and there's no credit check involved. At the end, you'll get a personalised recommendation.
2. Beehive Money
Beehive Money is part of The Nottingham, a building society founded all the way back in 1849. Beehive’s goal is to help you turn your homeownership dreams into a reality with easy-to-use tools and a network of carefully chosen partners. Its Homebuyer LISA could be for you if you’re looking for a way to boost your house deposit and manage your savings via a handy app.
What’s the interest rate? 3.50% tax-free p.a/AER.
How do you open an account? App
How do you manage your account? App
When is the interest paid? Annually
Can you transfer from other ISAs? Only from existing LISAs, not ISAs
3. Skipton Building Society
Skipton Building Society has been around since 1853, providing everything from savings accounts and ISAs to standard mortgages and insurance. You can easily open and manage an account with them online. However, if you want the option to pop into a branch to speak to someone in person, Skipton may be the best Lifetime ISA provider for you, since it has 88 of them across the UK. There’s also the option to talk via video link if you don’t have any branches close by. Its current interest rate of 3.80% is reasonable but variable, like many other LISA providers.
What’s the interest rate? 3.25% tax-free pa/AER variable
How do you open an account? Online
How do you manage your account? Online
When is the interest paid? Annually
Can you transfer from other ISAs? Yes
4. Paragon Bank
Next on our list of the best Lifetime ISA providers is Paragon Bank. Paragon is a specialist lender and savings bank that’s serviced more than £1.5million customer accounts. It was founded in 1985 and is part of the FTSE 250.
Paragon’s Lifetime ISA has been available since 2019. Once you’ve opened your account, you can manage it online, by post or over the phone. You can also transfer from other LISAs and there are no additional account fees.
What’s the interest rate? 3.51% gross/AER variable rate
How do you open an account? Online
How do you manage your account? Online, by post or phone.
When is the interest paid? Annually
Can you transfer from other ISAs? Yes but only other LISAs
See how much you could afford with our Mortgage Calculator
If you're saving up for a deposit and want to see what you could afford, have a go on our Mortgage Calculator. If your max borrowing isn't as much as you need, we can help. We specialise in helping buyers increase their buying budgets.
5. Newcastle Building Society
Newcastle Building Society provides savings accounts, mortgages and home insurance to millions of customers. It has 31 branches across the North East, but you don’t have to live in that region to use its products or services. You can open and manage your account online while also benefiting from fantastic customer service if you’re ever in need of help.
What’s the interest rate? 3.0% AER variable rate
How do you open an account? Online
How do you manage your account? Online
When is the interest paid? Annually
Can you transfer from other ISAs? Yes but only from existing LISAs
Worried your LISA savings aren't enough?
If you’d like help deciding which Lifetime ISA is right for you or you’re worried a LISA alone won’t be enough to get on the property ladder, create a recommendation with us today. We’re experts when it comes to alternative ways to get on the ladder, helping first-time buyers across the UK with just about any mortgage-related problem you can think of.
By creating a Tembo recommendation, you can see the best way for you to get on the ladder including indicative monthly repayments, interest rates and a downloadable Mortgage in Principle. It takes minutes to complete and there’s no credit check involved.
See how much you could afford with a personalised recommendation
Our award-winning team are experts at helping first-time buyers discover their true buying budget. Working with over 100 mortgage lenders, we can recommend the best scheme for your situation to boost your mortgage affordability.
Best Lifetime ISA providers - Stocks & Shares LISAs
If you’re using the Lifetime ISA for retirement, or are not planning to buy a home soon, a stocks and shares LISA may be more suitable than a cash LISA. Not only will the government top up your contributions by 25%, you’ll also benefit from investment growth — which historically has outperformed savings interest in the long term. However, the value of your investments can go down as well as up and you may get back less than you originally invested.
Wondering which stocks and shares LISA is best? Here are some of the top Lifetime ISA providers in the UK at the moment:
1. Nutmeg
Nutmeg is an online investment management service with a range of investment products including LISAs, ISAs, pensions, and general investment accounts. Nutmeg is the largest digital wealth manager in the UK with more than 200,000 clients. It believes investing should be a “clear and straightforward” experience, with its website promising transparency and easy access to performance metrics.
It offers a fully managed service where your portfolio will be managed for you, but this comes with an annual charge of 0.75%. Alternatively, you may choose a fixed allocation portfolio with a smaller fee of 0.45%.
Cost: 0.45-0.75% a year
Average annual fund cost: 0.27% to 0.35%
How to manage: Online/app
Minimum investment: £100
2. AJ Bell
AJ Bell is one of the UK’s largest investment platforms, with over 440,000 customers. Its Lifetime ISA may be ideal if you’d like a wide choice of investment funds. But with a high initial investment of either a £500 lump sum or £25 a month, it might not be suitable if you only want to invest small amounts.
Cost: 0.25% custody charge (maximum £3.50 a month for shares)
Fees to buy/sell funds: £1.50
Fees to buy/sell shares: £9.95 (or £4.95 if you made 10 or more share deals in the previous month)
How to manage: Online/app
Minimum investment: £500 lump sum/£25 a month
3. OneFamily
When you choose a Lifetime ISA with OneFamily, your money will be invested in climate-friendly investment funds. “Climate-friendly” can mean different things to different organisations, so here’s what it means to OneFamily:
- Higher revenue percentage from “green” business activities such as renewable energy production
- Lower greenhouse gas emissions
- A clear strategy and action plan to reduce greenhouse gas emissions
- Lower proportion of income from non-climate friendly activities such as drilling and mining
- Lower carbon emissions, including within their supply chain.
Cost: 1.10% annual management charge. 0.30% investment expenses charge
Fees to buy/sell funds: None
Fees to buy/sell shares: None
How to manage: Online
Minimum investment: £25 per month/£250 lump sum
4. EQi
It takes less than 10 minutes to set up an EQi LISA as a new customer. If you have an ISA with EQi, you can move up to £4,000 from there over to your LISA.
With no minimum investment and an annual charge of just 0.25%, this could be a good choice if you want to keep costs low and don’t have much cash to invest yet.
Cost: 0.20% annual charge, capped at £10 per quarter
Fees to buy/sell funds: No fees to buy OEICs & Unit Trusts but there’s a £10.99 charge on sales. £9.99 charge when buying and selling ETFs.
Fees to buy/sell shares: £10.99
Minimum investment: None
5. Hargreaves Lansdown
Hargreaves Lansdown is a FTSE 100 company, managing more than £140 billion for 1.7 million clients. When you open a Hargreaves Lansdown LISA, you can choose your own investments or pick one from its ready-made portfolios. You can add money to your LISA with a monthly Direct Debit, making it easier to grow your savings without having to think about it. If you don’t know what to invest in, you can add cash to your LISA now, then decide where to invest later on.
Cost: This depends whether you hold funds or shares. For shares, there’s an 0.45% annual management charge (capped at £45 a year). For funds, 0.45% on the first £250,000, 0.25% for the value between £250,000-£1m, 0.1% on the value between £1m-£2m and no charge on anything over £2m.
Fees to buy/sell funds: None
Fees to buy/sell shares: Between £5.95 and £11.95
How to manage: Online/app
Perfect for you: Should I buy a house?
Although a Lifetime ISA can be a huge help for first time home buyers, it’s not always enough. Property prices are rising so quickly it can be a challenge to save a decent house deposit. In fact, in our First Time Buyers Report, we found that the average first time home buyer needs a house deposit of almost £60,000 to buy a home in the UK, even more in London.
Next Up: How to buy a home with a low deposit
Struggling to save up enough?
With costs of living going up and earnings remaining flat, it’s unsurprising that one of the most common reasons we see for people being unable to get a mortgage is due to being unable to put money aside to save up a large enough deposit. Thankfully, we’re here to help. At Tembo, we work with over 100 lenders who offer specialist schemes to help those with a low or no deposit get on the property ladder. These include guarantor mortgage options including a gifted Deposit Boost and family springboard mortgages.
What is a Deposit Boost and how does it work?
If it’s your earnings that’s standing between you and your dream home, we can help with that too. There are various ways to increase your borrowing potential. An Income Boost could help to bridge the gap between your salary and lenders’ mortgage affordability checks with help from a loved one.
What is an Income Boost and how does it work?
And don’t worry if your family isn't in a position to help you. There are other options including joint mortgages with friends or siblings, shared ownership and 5.5x Income Mortgages which can help you get on the ladder sooner.
So whether you’re ready to buy or you’re wondering what your options could be, create a free plan with us today. On our homebuyer platform, our bespoke technology analyses your eligibility for specialist schemes from over 100 mortgage lenders to create a personalised recommendation just for you. Find out how much you could boost your affordability with Tembo.
Read More: How to save for a house
Interest rates accurate as of February 2024.
Discover your true house buying budget with Tembo
We specialise in helping home buyers to bridge the mortgage affordability gap with our smart decisioning technology. To find out how much you could borrow with our help, create a plan today on our homebuyer platform. It's free, takes 10 minutes to complete and there's no credit check involved.
