A Lifetime ISA is for saving towards a first home or for later life. The government adds a 25% bonus to what you pay in, up to £1,000 a year. The bonus is the same at every provider, so the table below ranks only the interest each provider pays.
18 to 39Age to open one
£4,000Most you can pay in each tax year, until you're 50
25%Government bonus, up to £1,000 a year
25%Charge on withdrawals that aren't for a first home, at 60+, or terminal illness
Cash Lifetime ISAs
The provider's interest rate only. The government's 25% bonus (up to £1,000 a year) is the same everywhere and is not in the AER.
* AER is the provider's interest only. The government bonus is not interest, is not in the AER and never affects the order.
Who holds the money: the 4 providers above
Paragon Bank
Deposit-taker
Paragon Bank, a trading name of Paragon Bank PLC
Incorporated in
United Kingdom
Regulated
Yes, by the Prudential Regulation Authority and Financial Conduct Authority (FRN 604551)
Protection and disputes
Financial Services Compensation Scheme and Financial Ombudsman Service
Capital
Paid-up capital and reserves of £1,046m at 30 September 2025 (latest published accounts).
Protection
FSCS: up to £120,000 per person across everything held with Paragon Bank PLC.
Bath Building Society
Deposit-taker
Bath Building Society, a trading name of Bath Investment & Building Society
Incorporated in
United Kingdom
Regulated
Yes, by the Prudential Regulation Authority and Financial Conduct Authority (FRN 206026)
Protection and disputes
Financial Services Compensation Scheme and Financial Ombudsman Service
Capital
Capital and reserves of £48.6m at 31 December 2024 (latest published accounts).
Protection
FSCS: up to £120,000 per person across everything held with Bath Investment & Building Society.
Skipton Building Society
Deposit-taker
Skipton Building Society
Incorporated in
United Kingdom
Regulated
Yes, by the Prudential Regulation Authority and Financial Conduct Authority (FRN 153706)
Protection and disputes
Financial Services Compensation Scheme and Financial Ombudsman Service
Capital
Capital and reserves of £2,861m at 31 December 2025, for its group (latest published accounts).
Protection
FSCS: up to £120,000 per person across everything held with Skipton Building Society.
Newcastle Building Society
Deposit-taker
Newcastle Building Society
Incorporated in
United Kingdom
Regulated
Yes, by the Prudential Regulation Authority and Financial Conduct Authority (FRN 156058)
Protection and disputes
Financial Services Compensation Scheme and Financial Ombudsman Service
Capital
Capital and reserves of £353m at 31 December 2025, for its group (latest published accounts).
Protection
FSCS: up to £120,000 per person across everything held with Newcastle Building Society.
Highest AER first, then the lower minimum deposit (ranking rules version 1.2.0). Cash Lifetime ISAs held directly with a bank or building society only: we don't list apps and platforms where another bank holds the money, or stocks and shares Lifetime ISAs, which are investments. Rates read 3 November 2026; check with the provider before you apply. How we rank.
Put in an amount to see a year's interest and the government bonus on separate lines at the top rate listed (Paragon Bank).
You pay in
£4,000.00
Interest from Paragon Bank at 3.51% AER
£140.40
Government bonus (25%, not interest)
£1,000.00
After a year
£5,140.40
Workings: interest £4,000 × ((1 + 3.51%)¹ − 1) = £140.40; bonus £4,000 × 25% = £1,000.00 (most £1,000 a year). Assumes the money is paid in at the start of the year and the rate stays the same; interest on the bonus, which arrives later, is left out. Taking money out other than for a first home, at 60 or over, or if terminally ill costs 25% of what you take out.
The rules, from GOV.UK
You must be 18 or over but under 40 to open one, and make your first payment before you're 40. You must live in the UK (armed forces and Crown servants overseas, and their spouses or civil partners, can too). GOV.UK: who can open a Lifetime ISA
You can pay in up to £4,000 each year until you're 50. It counts towards your £20,000 ISA allowance for 2026 to 2027. GOV.UK: Lifetime ISA
The government adds a 25% bonus to your savings, up to a maximum of £1,000 a year.
You can take the money out without a charge to buy your first home, if it costs £450,000 or less and you buy at least 12 months after your first payment; when you're 60 or over; or if you're terminally ill with less than 12 months to live. GOV.UK: withdrawing money
Any other withdrawal costs 25% of what you take out. That takes back more than the bonus: GOV.UK's example is £800 paid in plus a £200 bonus makes £1,000; taking it out costs £250, leaving £750, less than the £800 paid in. HMRC: withdrawal charges
In November 2025 the government said it will consult on a new first-time buyer product to replace the Lifetime ISA. Lifetime ISAs stay open to new savers until it arrives, existing holders keep saving under today's rules, and the £4,000 limit stays until April 2031. HMRC tax-free savings newsletter, November 2025
Rules checked on GOV.UK 30 October 2026.
Protection
A cash Lifetime ISA with a UK bank or building society is a deposit, covered by the FSCS up to £120,000 per person across everything you hold with that banking licence. Check your total protection.
This page explains how Lifetime ISAs work and what each provider pays. It isn't personal advice. A Lifetime ISA isn't the only way to save for a home or retirement; if you're unsure what suits you, speak to a regulated financial adviser.
