Lifetime ISAs (LISAs) offer a government-backed 25% bonus on annual contributions, making them a valuable tool for saving toward either your first home or retirement.
Cash Lifetime ISAs: Top-Paying Accounts
Cash LISAs function like regular savings accounts, earning interest on your deposits. They are ideal for those who prefer holding cash rather than investing.
- Moneybox Cash LISA: FSCS protected. Allows transfers in. Customer rating: 4.8/5.
- Tembo Money Cash LISA: FSCS protected. Customer rating: 4.8/5.
- Plum Cash LISA: FSCS protected. Customer rating: 4.8/5.
- Paragon Bank Cash LISA: FSCS protected. Customer rating: 3.8/5.
All cash LISAs are FSCS protected. Most allow transfers from existing ISAs, though rates may vary.
Stocks & Shares Lifetime ISAs: Investment Options
Stocks & Shares LISAs allow you to invest in funds or stocks. Returns are not guaranteed and depend on market performance.
- AJ Bell Dodl LISA: Offers DIY or ready-made portfolios. Annual fee of 0.15% (minimum £1/month). Interest on uninvested cash: 3.8% AER. Ready-made portfolios include 6 risk-based and one responsible investments option. FSCS protected.
- Hargreaves Lansdown LISA: Annual fee of 0.25% (reduced with higher investment). Interest on uninvested cash: 2.53%. Offers 4 risk-based portfolios. FSCS protected.
- AJ Bell Lifetime LISA: Annual fee of 0.25%. Interest on uninvested cash: 1.75%. Trading fees apply to individual shares (£5) and funds (£1.50). Offers managed funds with no trading fees for regular investors.
- Offers one ethical portfolio. No interest on uninvested cash. FSCS protected.
- Offers 6 ready-made portfolios, including three ethical options. FSCS protected.
- JP Morgan Personal Investing LISA: Annual fee of 0.75%. Offers 30 ready-made portfolios, including fully managed and ethical options. Offers 1% cashback on transfers of up to £500,000—only if you transfer £10,000 or more.
Some providers charge fees based on investment size. For example, Hargreaves Lansdown reduces fees as your balance grows.
Key Features and Restrictions
Contributions are capped at £4,000 per tax year. The government adds 25% to your contributions, with a maximum of £1,000 added annually.
- Must be between 18 and 39 to open a LISA.
- Can contribute until age 50.
- Withdrawals are only permitted for first home purchases or retirement.
- Withdrawals before age 60 for non-home purposes incur a 25% early withdrawal charge.
- Special exceptions exist for individuals with a terminal illness and less than 12 months to live.
Each LISA has different investment styles. Some offer ready-made portfolios, while others allow full DIY control.
Why This Matters
With a 25% government bonus, a LISA can significantly grow your savings over time.
Choosing the right type—cash or stocks & shares—depends on your financial goals and risk tolerance.
For those prioritizing safety, cash LISAs provide stable returns. For those seeking growth, stocks & shares LISAs offer potential returns, though with market risk.
Always review fees and interest rates before committing. The best option depends on your personal circumstances and financial objectives.
More information on how LISAs work and their rules is available in our full guide at Be Clever With Your Cash.
Sources & further reading
Featured image: CASH. 2026.png by GhoulFang, CC BY-SA 4.0, via Wikimedia Commons. Image source · License
