Lifetime ISA vs First Time Buyer ISA Calculator — What's Actually Confirmed

The Lifetime ISA (LISA) lets you save up to £4,000 a year and receive a 25% government bonus, worth up to £1,000 a year, added monthly. It's available to those aged 18 to 39 when opening, and you can contribute until age 50. Funds can be used toward a first home purchase up to £450,000, or accessed penalty-free from age 60.

Running your numbers through a genuine Lifetime ISA vs First Time Buyer ISA calculator matters right now because the policy landscape genuinely changed in June 2026, and a lot of online guidance still describes the LISA as if it were the only option, or worse, wrongly implies it's already been withdrawn. Neither is accurate: the LISA remains fully open and functioning under its existing rules today, while a replacement product is separately being consulted on for a future launch.

Genuine policy transitions like this one create a specific kind of confusion: some savers assume the LISA has already been scrapped and stop contributing, potentially missing out on real bonus money they were entitled to. Others assume the new First Time Buyer ISA is already available with known terms, when in reality several of its most important figures haven't been decided.

A properly built Lifetime ISA vs First Time Buyer ISA calculator needs to do two things well: calculate real numbers for the product that genuinely exists today, and clearly flag which claims about the future product are confirmed government policy versus which remain open questions. Conflating the two, treating speculation as settled fact, does readers a genuine disservice at a moment when accurate information actually matters for their savings decisions.

Also confirmed: both cash and stocks and shares versions will be offered, a qualifying purchase requires a regulated mortgage (cash purchases won't qualify), and the account must be open for at least 12 months before a bonus claim can be made. The 25% withdrawal penalty that LISA holders face is being removed entirely — you'll be able to withdraw your own contributions without losing your own capital, though you'd forfeit the bonus on whatever you withdraw early.

It's also confirmed that Help to Buy ISA balances will be transferable into the new FTB ISA, while existing LISA balances will not be eligible for direct transfer. Both a LISA and the new FTB ISA can be used toward the same eventual house purchase, though savers will only be able to actively pay into one of the two accounts at any given time.

Three genuinely important figures remain undecided: the annual subscription limit, the property price cap, and the percentage used to calculate the government bonus. These will be announced at a future fiscal event, not within the June 2026 consultation itself — meaning anyone trying to plan precisely around the new product is genuinely working with incomplete information for now. This is exactly why a fair Lifetime ISA vs First Time Buyer ISA calculator should show only confirmed figures, not guessed ones.

Industry figures have raised a genuine concern: moving the bonus to the point of purchase, rather than adding it during saving, means it doesn't compound with investment growth the way a LISA bonus can under a stocks and shares account. This could mean first-time buyers need to save for longer to reach the same effective deposit under the new structure, depending on how the final bonus rate is set. Running both scenarios through a Lifetime ISA vs First Time Buyer ISA calculator side by side makes this compounding gap genuinely visible.

Many commentators, including consumer finance broadcasters, have suggested opening a Lifetime ISA now, even with a small deposit, to preserve the option of using it under today's known, confirmed rules. Existing LISAs will not be closed, and current holders can keep contributing indefinitely under existing rules — but once the FTB ISA launches, it's not yet clear whether new LISAs can still be opened.

This is precisely why the practical advice from several commentators has been to open an account with a nominal deposit now, even just a token amount, rather than waiting until closer to an eventual purchase. Doing so locks in eligibility under the current, fully understood rules, while leaving the door open to decide later, once the FTB ISA's actual terms are confirmed, which product genuinely suits your specific savings timeline better.

Withdrawing LISA funds for anything other than a qualifying first home purchase, or after age 60, triggers a 25% government withdrawal charge on the whole withdrawal — not just the bonus portion. Because 25% of the total is more than the 25% bonus originally added, this can mean withdrawing your own money back leaves you with genuinely less than you originally paid in, which is precisely the flaw the FTB ISA is designed to fix.

This mismatch has been widely criticised by regulators and consumer groups alike, and it's directly named by the Treasury as a key reason for the reform. If you're at all uncertain whether you'll genuinely reach the point of a qualifying first home purchase, or might need access to the money for something else, this penalty structure is worth understanding thoroughly before committing large sums to a Lifetime ISA under today's rules.

Here's how the numbers work through a real Lifetime ISA vs First Time Buyer ISA calculator scenario. Saving the maximum £4,000 a year for 4 years into a LISA. Total contributions: £16,000. Government bonus at 25%: £4,000. At an assumed 3% annual growth rate, the pot reaches roughly £21,169 — a genuinely significant deposit boost, entirely from money the government adds on top of your own saving. This is exactly the kind of concrete comparison a Lifetime ISA vs First Time Buyer ISA calculator should make clear before the newer product's own numbers are even confirmed.

Official sources & further reading: check current LISA rules at GOV.UK, and follow the FTB ISA consultation at GOV.UK consultations. Check your wider mortgage plans with our mortgage affordability calculator, or check stamp duty on your first purchase with our stamp duty calculator.