Always remember that investments can go down as well as up in value, so you could get back less than you put in. A rule of thumb is to hang on to your investments for at least five years to give them the best chance of providing the returns you are hoping for.

Best Lifetime ISA Providers

Updated On: Nov 7, 2022
Best Lifetime ISA Providers

Contents:

Best Lifetime ISA Providers

We’ve compiled a list of some of the best Lifetime ISA providers in the UK. These are apps, platforms, websites and fund supermarkets that allow you to invest in stocks, shares, ETFs, bonds and other assets towards buying your first home or for retirement as part of the government’s Lifetime ISA scheme.

Please remember that when you invest, your capital is at risk. Lifetime ISA rules apply. Other charges apply.

Compare some of the best Lifetime ISA providers in the UK:


AJ Bell - Mid-price range; Lots of investment options

AJ Bell Logo
Account Type
DIY & Ready-made
Dealing Fee (Online)
£1.50 (Funds)
£9.95 - £4.95 (Shares)
Annual Platform Fee
0.25% - 0% (Funds)
0.25% (Shares: max £3.50/month)
Minimum Deposit
£500 (lump sum)
or £25 (per month)

AJ Bell is a UK investment platform that allows you to save for big future plans, such as buying a first home or retirement, via a Lifetime ISA. The AJ Bell Lifetime ISA lets you choose from a wide range of shares, funds, ETFs, investment trusts, gilts and corporate bonds. Payments towards your Lifetime ISA cannot exceed £4,000 a year and also count towards your overall ISA allowance of £20,000. AJ Bell offers a regular investment service, which lets you invest as little as £25 per month into your LISA. Setting up a regular investment is simple, and AJ Bell will then automatically make deals on the 10th calendar day of each month (or the next working day) for you.

AJ Bell charges an annual platform fee ranging from 0.25% to 0%. Dealing fees for buying and selling investments online are £1.50 for funds and £9.95 for shares (reducing to £4.95 if there were 10 or more online share deals in the previous month). As well as a Lifetime ISA, AJ Bell offers a Stocks and Shares ISA, Junior ISA, SIPP, Dealing Account and Junior Dealing Account. 

Capital at risk. AJ Bell does not offer advice. Lifetime ISA rules apply.

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Hargreaves Lansdown - Lots of investment options, research and tips

Hargreaves Lansdown
Account Type
DIY & Ready-made
Dealing Fee (Online)
£0 (Funds)
£11.95 - £5.95 (Shares)
Annual Platform Fee
0.45% - 0% (Funds)
0.45% (Shares: max £45/year)
Minimum Deposit
£100 (lump sum)
or £25 (per month)

Hargreaves Lansdown is a FTSE 100 company and the biggest investment platform in the UK. Hargreaves Lansdown allows you to save towards buying a first home or retirement via a Lifetime ISA. You can kickstart your Hargreaves Lansdown Lifetime ISA by choosing from over 2,500 funds, UK and overseas shares, ETFs, investment trusts and more. With Hargreaves Lansdown, you can build your Lifetime ISA portfolio in one of two ways depending on your investing savviness: Beginner investors or those who prefer to choose a ready-made investment portfolio can build their Lifetime ISA by choosing from a range of ready-made options where the team of experts at Hargreaves Lansdown take care of the day-to-day investment decisions for you. Advanced or more confident investors can choose from a wide range of funds, shares and other investments and build their Lifetime ISA portfolios themselves.

Hargreaves Lansdown charges an annual platform fee which is never more than 0.45%. Dealing charges start at £11.95 per deal, reducing to £8.95 if there were 10 - 19 deals in the previous month, and further reducing to £5.95 if there were 20+ deals in the previous month. If you need a financial adviser to help you choose investments, Hargreaves Lansdown offers a financial advice service at a fee. Hargreaves Lansdown’s suite of investment products includes a Stocks and Shares ISA, Lifetime ISA, Junior ISA, Fund and Share Account and SIPP.

Capital at risk. Lifetime ISA rules apply. Other charges apply.

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What Is a Lifetime ISA?

A Lifetime ISA (or LISA) is a longer-term tax-free savings or investment account created to help those between the ages of 18 and 39 save for their first home or retirement. Each tax year, you can pay up to £4,000 into a Lifetime ISA.

The government will add a 25% bonus to your Lifetime ISA every tax year up to a maximum of £1,000 per year, and you can continue saving or investing into a LISA until you are 50.

How Do Lifetime ISAs Work?

You can open a Lifetime ISA with financial institutions such as banks, building societies, stockbrokers, fund supermarkets and robo advisors.

There are two types of Lifetime ISAs: Stocks and Shares Lifetime ISA and Cash Lifetime ISA.

  1. Stocks and Shares Lifetime ISA: A Stocks and Shares Lifetime ISA allows you to invest your annual Lifetime ISA allowance in qualifying assets such as shares, corporate bonds, government bonds (gilts) and funds. Any gains or income from investments held in a Stocks and Shares Lifetime ISA are tax-free.

  1. Cash Lifetime ISA: A Cash Lifetime ISA allows you to save your annual Lifetime ISA in a cash savings account and earn tax-free interest.

Stocks and Shares Lifetime ISAs are generally riskier than Cash Lifetime ISAs but can also generate higher returns. You can choose the right Lifetime ISA for you depending on your risk tolerance and long-term goals.

Paying into a Lifetime ISA is simple and can be done through your bank account. Parents and grandparents can also contribute to a Lifetime ISA opened by their children or grandchildren.

If you choose to open a Stocks and Shares LISA, you’ll be able to invest up to £4,000 in a wide variety of assets. Depending on your preferred investment platform, you will also have the option to select and manage the individual assets that make up your portfolio (DIY or self-select LISA) or choose from a range of ready-made portfolios (robo advisor, ready-made or managed LISA).

You get a new ISA allowance (£20,000) at the beginning of each tax year. Your £4,000 Lifetime ISA limit is included in this allowance. Any unused allowance expires at the end of the tax year and cannot be carried forward into the new tax year.

When you are ready to invest, you can choose between making a lump sum investment and/or making regular or ad hoc contributions throughout the tax year.

Here are a few examples of the types of assets that can be held within a Stocks and Shares Lifetime ISA:

  1. Individual Stocks and Shares: When you buy a share, you own a small unit of a public company. So, if you bought a share in Apple, for example, you will become a part-owner of Apple. If it performs well, you will benefit from its success. If it does not, you may lose some money. Shares are also called equities or stocks.

  2. Corporate Bonds: When you invest in a corporate bond, you are lending money to a company in return for interest.

  3. Government Bonds: When you invest in a government bond or gilt, you are lending money to a government in return for interest.

  4. Funds: Instead of buying individual stocks and shares, bonds, or other assets directly, you can choose to invest in a fund. A fund pools money from you and other investors, and a specialist fund manager invests this money in a variety of assets, including shares, bonds, properties, and commodities (gold, oil, agriculture, etc.). Most people, including experienced investors, use funds when investing.

You can put the money in your Lifetime ISA towards your first home if all the following apply:

  1. The property costs £450,000 or less.
  2. You buy the property at least 12 months after you make your first payment into the Lifetime ISA.
  3. You use a conveyancer or solicitor to act for you in the purchase - the ISA provider will pay the funds directly to them.
  4. You’re buying with a mortgage.

You can also buy a property with someone else if they too have a Lifetime ISA.

Additionally, your Lifetime ISA can be used to save for retirement, and you can withdraw from your Lifetime ISA when you are 60 and over.

Lifetime ISA Rules

  1. You must be between the ages of 18 and 39 to open a Lifetime ISA.
  2. You can put in up to £4,000 per year until you are 50. Your first payment into the Lifetime ISA must be before you are 40.
  3. You can only withdraw the savings if you are:
  • ~~Buying your first home.
  • ~~Aged 60 or over.
  • ~~Terminally ill with less than 12 months to live.

You’ll pay a withdrawal charge of 25% if you withdraw cash or assets for any other reason (unauthorised withdrawals).

Advantages of Lifetime ISAs

Here are some of the advantages of Lifetime ISAs:

  1. The government offers a generous bonus of 25% to incentivise people to save.
  2. All income and profits from your savings and investments in a Lifetime ISA are tax-free.
  3. It is straightforward to open a Lifetime ISA, and most providers are online.
  4. A Stocks and Shares Lifetime ISA enables you to invest in a wide range of assets, including shares, funds, ETFs and bonds.

Disadvantages of Lifetime ISAs

Here are some of the disadvantages of Lifetime ISAs:

  1. The proceeds have limited uses as they can only be used to purchase your first property or for retirement.
  2. Better ways to save for retirement are available, such as employer pension schemes that match your contributions.
  3. Money in a pension can be withdrawn earlier at 55 (increases to 57 in 2028), while the Lifetime ISA is only available for withdrawal when you turn 60.
  4. If you change your mind later on about purchasing a property and wish to withdraw your money, you lose the government bonus.

Lifetime ISA Charges

Investment platforms charge several fees for using their services. The main fees are the annual platform fee, fund management fee, trading fee, and transfer out fee. Depending on your investment provider and how you choose to invest, there might be some other charges.

  1. Annual Platform Fee:‍‍ The investment platform charges this for providing a platform for you to invest. It is usually displayed as a percentage of your investments or a fixed fee.

  2. Fund Management Fee: It is also known as Ongoing Charges Figure (OCF) or Total Expense Ratio (TER). This is the fee paid directly to the fund manager and represents the actual cost of your investments.

  3. Trading Fee: It is also known as a dealing fee. This is the fee for buying and selling funds, shares, and other types of investments on a platform.
  4. Transfer Out Fee: It is also known as an exit fee. It is the fee you pay for moving your investments from one provider to another.


Frequently Asked Questions

1. Is it worth having a Lifetime ISA?

Whether you should have a Lifetime ISA or not depends on your individual circumstance. People use Lifetime ISAs to save for retirement or buy their first home. If you are opening a Lifetime ISA solely for the purpose of saving for retirement, it might be better to consider a pension, especially one where your employer matches your contribution.

However, opening a Lifetime ISA to buy your first home might be a good idea as it allows you to reach your savings goals quicker because of the government bonus. Additionally, once you have bought your first home, you can continue to save within your Lifetime ISA for retirement. The primary disadvantage here is that there is a 25% charge if you change your mind about buying a home or saving for retirement and decide to withdraw your money instead. A Lifetime ISA has both advantages and disadvantages, and it is important to consider these before investing.


2. Can I have a Lifetime ISA and a pension?

Yes, you can hold a Lifetime ISA alongside a workplace or private pension. A Lifetime ISA is not considered a pension product and instead works as an additional way to save for retirement.


3. Can I use my Lifetime ISA to buy a house with someone else?

Yes, you can use your Lifetime ISA to buy a house with someone else. It is important to note that if they own or have a legal interest in a property (for example, they’re a beneficiary of a trust that includes property), they’ll pay a 25% withdrawal charge to use the money in their Lifetime ISA.


4. Do Lifetime ISAs earn interest?

Yes, Lifetime ISAs earn interest, and this interest is tax-free. It is also possible to invest in stocks and shares using your Lifetime ISA, and the returns on these are tax-free too. Providers will often offer you the choice of a DIY account, where you actively choose the stocks and shares to invest in or a ready-made account where a team of professionals manages your investments on your behalf.


5. How many Lifetime ISAs can I have?

You can open multiple Lifetime ISAs in your Lifetime but can only pay into and receive your government bonus on one Lifetime ISA each tax year. The tax year starts on the 6th of April and ends on the 5th of April the following year.

6. Can I have a Stocks and Shares ISA and a Lifetime ISA?

Yes, you can hold a Stocks and Shares ISA and a Lifetime ISA at the same time. Each tax year, you can open all four ISAs (Cash ISA, Stocks and Shares ISA, Lifetime ISA and Innovative Finance ISA), provided you do not exceed the overall ISA limit of £20,000 per tax year.


7. Can I use an ISA for a self-build property?

Yes, you can use a Lifetime ISA to buy land for a self-build property as long as the purchase meets all the other criteria for purchasing a property through the scheme, which include:

  1. The property costs £450,000 or less.
  2. You buy the property at least 12 months after you make your first payment into the Lifetime ISA.
  3. You use a conveyancer or solicitor to act for you in the purchase - the ISA provider will pay the funds directly to them.
  4. You’re buying with a mortgage.


8. Is there a minimum mortgage amount to be able to use the Lifetime ISA?

No, there is no required minimum mortgage amount to be able to use a Lifetime ISA. You do need a mortgage in order to use the Lifetime ISA, and the mortgage must be a residential mortgage (not buy to let).


9. Can I use my Lifetime ISA for a house deposit?

Yes, you can use your Lifetime ISA for a house deposit. Money in a Lifetime ISA can be put towards an exchange deposit, provided the property purchase is completed within 90 days of your conveyancer receiving the withdrawn funds from your Lifetime ISA manager.

10. What are the best Lifetime ISA providers in the UK?

Here are some of the best Lifetime ISA providers in the UK:

  1. AJ Bell - Mid-price range; Lots of investment options
  2. Hargreaves Lansdown - Lots of investment options, research and tips
  3. Moneybox - Offers socially responsible portfolios; Auto-investing available
  4. Nutmeg - Offers ethical portfolios; Ready-made portfolios only


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