Buying a house feels impossibly far off when you're a student. But a Lifetime ISA is worth knowing about now — because the earlier you open one, the more the government bonus compounds over time.
The basics: a Lifetime ISA (LISA) lets you save up to £4,000 a year, and the government adds a 25% bonus on top — up to £1,000 per year. That's free money, specifically to help you buy your first home. You do need to be under 40 to open one, and there are rules about when you can access the money, but for students thinking about eventually getting on the property ladder, it's one of the best savings tools available.
Before students think about saving for a LISA, they might need income first, as well as extra funding and support while at university.
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Things to Consider Before Opening a LISA
You must be aged 18–39 to open one (you can keep contributing until the day before your 50th birthday)
Maximum contribution: £4,000/year (the government bonus tops this up to £5,000 — this counts towards your overall £20,000 ISA allowance)
The money can only be used for: buying your first home (after the account has been open at least 12 months), retirement (from age 60), or terminal illness
The maximum property value you can use your LISA towards is £450,000 — this limit has been frozen since 2017 and is currently under government review, but has not been increased yet as of mid-2026
Early withdrawal incurs a 25% penalty on the amount withdrawn — which effectively means you lose more than just the government bonus
You cannot use your LISA to buy a property to rent out — it must be your main residence
You can combine your LISA with a partner's if buying together
Top Cash Lifetime ISA Providers 2026
Note: interest rates change with the Bank of England base rate and provider decisions. Always check current rates before opening an account.
Provider | Minimum Investment | Rate (AER) | Accepts ISA Transfers? | How to Open | Interest Paid |
|---|---|---|---|---|---|
Moneybox | £1 | 4.45% (2.80% base + 1.65% first-year bonus, reverts to 2.80% after 12 months) | Yes, but only if you haven't had a Moneybox LISA before | App | Monthly |
Tembo Money | £1 | 4.30% (3.80% base + 0.50% first-year bonus) | Yes, from existing LISAs only | App | Monthly |
Plum | 1p | Variable (check current rate — includes a first-year Plum bonus) | Yes, from existing LISAs only | App | Monthly |
Paragon Bank | £1 | 3.51% | Yes, from existing LISAs only | Online | Annually |
Bath Building Society | £1 | Check current rate | No | Online or branch | Annually |
Skipton Building Society | £1 | Check current rate | Yes, including from Stocks & Shares ISAs | Online | Annually |
Nottingham Building Society | £1 | 2.25% | Yes, from existing LISAs only | App | Annually |
Newcastle Building Society | £1 | Check current rate | Yes, from existing LISAs only | Online | Annually |
For the most up-to-date rates, MoneyfactsCompare updates LISA rates every hour.
Top Stocks and Shares Lifetime ISA Providers 2026
A Stocks and Shares LISA works like a cash LISA but your money is invested in the market rather than held as cash. You still get the government bonus, but returns depend on investment performance — higher potential growth, higher risk.
Provider | Minimum Opening Deposit | Key Fees |
|---|---|---|
AJ Bell | £250 one-off or £25/month direct debit | 0.25% custody charge; £1.50 to buy/sell funds; £5 to buy/sell shares |
Hargreaves Lansdown | £100 one-off or £25/month direct debit | 0.35% annual account charge |
Tembo Money | £25 | 0.35% platform fee + 0.17% fund provider fee (BlackRock) |
Moneybox | £1 (or £100+ for manual transfers) | 0.45% monthly platform fee; £1/month subscription (free first 3 months; waived with £5,000+ in a Moneybox Cash ISA) |
J.P. Morgan | £500 | 0.45% annual management fee up to £100k (0.25% above that) |
Can You Have a LISA and a Cash ISA at the Same Time?
Yes. You can hold multiple ISAs simultaneously as long as they're different types. Your total ISA allowance is £20,000 per tax year across all accounts. Since a LISA caps out at £4,000, you could put up to £16,000 into a cash ISA in the same year.
How Do You Open a Lifetime ISA?
You need to be:
Aged 18–39
A UK resident
Once you've chosen a provider and confirmed eligibility, the process is straightforward — you'll typically need your National Insurance number, date of birth, and proof of ID. You'll need to make your first contribution before you turn 40.
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