young woman carrying cardboard box and houseplant while arriving in her new home.
A Lifetime Isa can be a strategic way for under-40s to save either for their first home, or retirement. Not only do savings grow tax-free, but the Government rewards savers with a 25pc top-up too, worth up to £1,000 a year.
Savers can choose between cash Lifetime Isas, which pay interest like a savings account, or a stocks and shares Lifetime Isa, where your money is invested in the stock market.
Whichever you plump for, it’s important to do your research to get the best deal. Here Telegraph Money reviews the best Lifetime Isa providers in 2025 in both the cash and stocks and shares categories.
The Best Buy tables show the best savings rates widely available in the market. This means certain accounts are excluded, such as those that are available only to local or existing customers.
The data in the tables is provided by Savings Data Limited and is compiled using automated tracker tools and updates from savings providers. Savings Data Limited then manually checks the information and enters it into a database that feeds the live tables, which update daily.
The savings accounts shown are protected by the Financial Services Compensation Scheme. The information in this article is intended for information purposes and should not be taken as endorsement or advice.
Best Lifetime Isa providers: cash
People saving for a property are likely to favour the certainty of cash if they are planning to buy in the next few years. When it comes to cash, the “best” providers are essentially those that pay the most.
However, it’s worth thinking about other factors too, such as how you will need to open and run the account and whether or not the provider will accept transfers in. This will be important if you already have savings or investments in other types of Isas, which you would like to move into your pot.
The table below shows the top-paying cash Lifetime Isas currently available:
Given Lifetime Isas are for very specific savings goals, it might not be the best choice for you. Our guide to the best cash Isas can reveal other tax-free accounts to consider.
If you’re using a Lifetime Isa to build up money for your retirement, or a property purchase is five years or more away, it may be worth considering a stocks and shares Lifetime Isa. Although stock market returns are not guaranteed, the evidence suggests that over the longer term, your money is likely to grow faster if it’s invested in the stock market than it would in cash account.
However, while a stock market Lifetime Isa should deliver better returns – potentially helping you to buy your home sooner – finding the best deal for you is a bit more complicated. You’ll need to take into account both the investment options available to you and charges.
The table below is based on analysis from comparison site Boring Money. We’ve based the cost calculations on a £4,000 investment, the maximum you can invest in a Lifetime Isa each year.
Hargreaves Lansdown
Britain’s biggest investment platform comes out on top in Boring Money’s analysis, scoring 4.5 stars out of five. The platform offers a broad choice of investment options including ready-made solutions for those who don’t want to make investing decisions. It also offers plenty of fund ideas for those who are new to investing.
The platform fee is low compared to some of its competitors but note it doesn’t include investment charges. Although there are no fees to buy and sell funds with Hargreaves Lansdown, there’s an £11.95 dealing charge for shares, investment trusts and ETFs. As such it’s an absolute bargain for investors who are happy to stick with funds, but prices could rise rapidly if you’re a more active investor with an appetite to trade.
Boring Money also notes the platform is easy to navigate and backed by a good app.
Nutmeg
Nutmeg is an entirely different proposition that targets those who don’t want to make investment decisions. Rather than giving access to a diverse range of investment options, the so-called “robo-adviser” matches you to a managed portfolio that is based on your investment goals and attitude to risk. This makes it a good option for beginners who might be overwhelmed by the choices on offer from the typical big investment platform.
The charges listed on our table is for the cheapest fixed allocation portfolio, costs go up for other portfolios in range included thematic investing, fully managed or socially responsible. Each portfolio is largely made up of exchange-traded funds or ETFs.
Owned by giant American bank JPMorgan since 2021, Nutmeg is considered to be the most established robo-adviser in the UK.
Boring Money also praised its easy-to-use app.
AJ Bell
AJ Bell is a well-established investment platform offering a broad choice of investments from funds and shares to ETFs and investment trusts.
Backed by strong content and research, it’s a good option for keen investors who want to choose their own funds or shares. That said there are still AJ Bell’s ready-made portfolios for those wanting an easy start.
The fee quoted in our table doesn’t include investment charges. There’s a £1.50 fee each time you buy a fund, unless you are buying AJ Bell’s own-brand funds which you can invest in free of charge. Share dealing is £5 a trade.
If you like the look of AJ Bell but are feeling a bit daunted by the number of options available, it might be worth looking at a Lifetime Isa on its app-only platform, Dodl.
It offers access to a much more limited range of investments including a selection of AJ Bell funds, themed ETFs and approximately 80 popular shares.
The app is very much aimed at younger investors at the start of their investment journey and includes plenty of investment content targeted at beginners.
Lifetime Isa vs other Isas
There are a lot of differences between lifetime Isas and other types of Isas, which means they’re only suitable for quite a specific kind of saver. We’ve outlined the key differences below:
Maximum deposit: While you can pay in up to £20,000 into other adult Isas, you can only pay up to £4,000 into a lifetime Isa each tax year. This contributes towards your overall Isa allowance, so if you’ve paid £4,000 into a lifetime Isa, you’ll have £16,000 left to deposit elsewhere.
Age restriction: Only those aged between 18 and 40 can open a lifetime Isa; for all other types of Isas you must be 18 or over.
Government bonus: You’re paid a 25pc government bonus on anything you deposit into a lifetime Isa, up to a maximum of £1,000, in addition to any savings interest or investment growth. This doesn’t exist with other types of Isas – apart from Help to Buy Isas, which are closed to new customers. With these accounts, the overall maximum bonus is £3,000 – far less than what you could get with a lifetime Isa.
What the money can be used for: Money in a lifetime Isa can only be used to buy your first home (up to the value of £450,000), or to use in retirement after the age of 60. Withdrawing money for any other reason will mean you’re charged a withdrawal penalty (more on this below). You may also be able to access the money if you’re diagnosed with a terminal illness.
Withdrawal penalty: If you don’t use the money for the reasons set out above, you’ll face a withdrawal penalty of 25pc. This means you’ll lose all of the government bonus plus 6.25pc of your own money.
How to find the best Lifetime Isa provider for you
First and foremost it’s important to decide whether you should invest in a cash or a stocks and shares Lifetime Isa. You can access your Lifetime Isa when you need it (either to buy your first home or when you reach age 60). However, as a guide, it’s usually recommended that savers stick with cash if they are likely to need their money within the next five years.
For cash Isas, look for the highest rate on offer that can be run in the way you need. The ability to transfer in money from other Isas is important if you have other pots you want to pay in.
If you’ve got five years or more before you need your money, it’s worth considering a stocks and shares Lifetime Isa, with a view to getting higher returns than cash. However, even with a cautious or low-risk holdings, returns aren’t guaranteed and the value of your investment is likely to rise and fall throughout your investment journey.
When you’re choosing a stocks and shares Lifetime Isa, it’s important to think about the costs your platform will charge, taking into account how you are likely to invest (for example whether you want to choose your own funds or shares or whether you would prefer a ready-made option). While one platform might work out cheapest for an investor that sticks with low-cost index fund, it could work out more costly for an active investor that trades regularly.
While costs are important, it’s also important to think about how easy the app or website is to use and think about what support they offer, in terms of research, content and ideas – especially if you’re new to investing.
