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Top 10 Lifetime ISA Providers

Top 10 Lifetime ISA Providers

By Jenni Hill
Published 29 December 2022

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. 

In this guide

  • Best Lifetime ISAs - Cash LISAs
  • Best Lifetime ISAs - Stocks & Shares LISAs

Best Lifetime ISAs - 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. 

Here are the best cash Lifetime ISA providers to choose from:

1. 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? The annual interest rate is variable but currently set at 2.30% 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

2. 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 1.75% is reasonable but variable, like many other LISA providers. 

What’s the interest rate? 1.75% 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

3. Paragon Bank

Next on our list of the top 10 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? 1.6% 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

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4. 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? 1.50% 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

5. Nude

Nude lets you save and invest for the future with their Lifetime ISAs. You can choose to save your money as cash, or invest it, in which case your money and the government bonus will go into a fund which buys shares of companies and other assets. Their Stocks & Shared LISA could be a good option for the long term if you’re not looking to buy in the next five years, however your investments can go down as well as up. If you are eco-conscious, with Nude you can also choose to invest in a fund that takes ethics and sustainability into account.

If you’re looking to buy soon, their Cash LISA might be a better option, although you’ll need to open your account at least 12 months before you plan on buying a home. It all depends when you want to buy, and how much risk you are comfortable with taking.

Nude also currently offers a market-leading interest rate of 3%, though this is variable so may change in future. You can also easily manage your account from its app, and they do accept LISA transfers if you’re thinking of switching.

What’s the interest rate? 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

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 plan 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 plan, you’ll get a personalised recommendation which includes indicative monthly repayments, interest rates and a downloadable Tembo Mortgage in Principle. It takes minutes to complete and there’s no credit check involved.

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Best Lifetime ISAs - 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 best 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

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. 

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 joining mortgages with friends or siblings, shared ownership mortgages and equity loans which can help you get on the ladder sooner.

So whether you’re ready to buy or you’re wondering what your options are, create a 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.

Interest rates accurate as of December 2022.

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