Yes. The government has confirmed it will withdraw the Lifetime ISA and replace it with a First Time Buyer ISA. But a lot of what has been reported about it is not in the consultation document, including the date everyone keeps quoting. Here is what is actually confirmed, what is still blank, and what it changes for you.
HM Treasury published a consultation on 23 June 2026 setting out a new First Time Buyer ISA, offered "in place of the Lifetime ISA". The consultation closes at 11:59pm on 18 August 2026. It asks how the replacement should work, not whether the change should happen. The direction is settled.
The stated reason is that the LISA has not worked well for a lot of people who bought one. The Treasury's own evidence is blunt: unauthorised withdrawal charges hit 8% of all accounts opened in 2024-25, and more holders have lost part of their original savings to the charge than have used the account to buy a home.
This is the part most coverage gets wrong. You will see April 2028 quoted widely. That date does not appear in the consultation document.
What the document actually says is that the government wants the new product available "as soon as practically possible" and will work with industry on how to achieve it. Until then, "it will remain possible to open a LISA and LISA holders will be able to save into their LISA in line with the existing rules indefinitely".
Why this matters: a firm date would tell you how long your window is. There isn't one. Planning around April 2028 means planning around a number a journalist supplied, not the Treasury.
Three of the numbers that decide whether the replacement is better or worse than what it replaces are simply not published yet. The consultation says subscription limits, property price caps and the level of the government bonus "will be announced at a future fiscal event".
| Feature | Lifetime ISA (now) | First Time Buyer ISA |
|---|---|---|
| Government bonus | 25% | Not announced |
| Annual contribution limit | £4,000 | Not announced |
| Property price cap | £450,000 | Not announced |
| Charge for other withdrawals | 25% | None |
| Can be used for retirement | Yes, from 60 | No |
| Age limit to open | Under 40 | 18+, no upper limit |
Anyone telling you the new product is worth more or less than the old one is filling in three blanks the Treasury deliberately left. The consultation does note that the price cap will be aligned across the LISA, Help to Buy ISA and the new product once set, and it openly floats a lower cap to fund a higher bonus, which would shift the benefit away from London and the South East.
Most coverage frames this as a first-home story, because that is what the new product is for. But the LISA had a second use that the replacement does not have at all: from age 60 you can take the money out for anything, tax-free, bonus included.
The First Time Buyer ISA is exactly what it says. There is no retirement route. So for anyone who was using a LISA as a long-horizon tax-free pot rather than a deposit fund, this is not a like-for-like swap, whatever the eventual bonus rate turns out to be.
Nothing is being taken off you. Specifically, according to the consultation:
"Withdrawn" here means withdrawn from new business at some future point. It does not mean existing accounts get closed.
Yes, if you are 18 or over and under 40. That age rule has not changed, and it is the one that catches people out: the LISA can only ever be opened before your 40th birthday, and once the product is withdrawn that route closes for good.
We are not going to tell you whether to open one, and be wary of anyone who does without knowing your situation. What we can do is report the rules, so the decision is at least an informed one:
Worth understanding whichever way you go, because it is the design flaw that got the product withdrawn.
The bonus is 25% of what you pay in. The withdrawal charge is 25% of the whole balance, bonus included. Those are not the same 25%, and the difference comes out of your own money.
| Step | Amount |
|---|---|
| You pay in | £1,000 |
| Government adds 25% | £1,250 |
| You withdraw outside the rules, charge is 25% of £1,250 | minus £312.50 |
| You get back | £937.50 |
You are £62.50 worse off than if you had never opened it, a loss of 6.25% of your own savings. That is the mechanism behind the Treasury's finding that more people lost money to the charge than bought a home with the account.
Free calculatorSee what the 25% bonus adds over time on your contributions, while the current rules still apply.
Open the Lifetime ISA calculator →Yes. HM Treasury published a consultation on 23 June 2026 confirming it will withdraw the Lifetime ISA and offer a new First Time Buyer ISA in its place. The consultation closes on 18 August 2026. It covers how the replacement will work, not whether the change happens.
No date has been set. The consultation says only that the government wants the new product available as soon as practically possible and will work with industry on how to achieve it. Several reports have quoted April 2028, but that date does not appear in the consultation document.
Yes, if you are 18 or over and under 40. The consultation states that until the new product launches it will remain possible to open a LISA, and that holders will be able to save into it in line with the existing rules indefinitely. The under-40 rule for opening one has not changed.
Nothing is being taken away from existing holders. You can carry on paying in under the current rules indefinitely, keep the 25% bonus on those contributions, and still use the account for a first home or from age 60. Withdrawal is the withdrawal of the product from new business, not the closure of existing accounts.
No. The consultation is explicit that LISA holders will not be able to transfer a LISA into the new product. You can hold both at once and use money from both for the same purchase, but you can only pay into one of them in any given tax year. Help to Buy ISA holders, by contrast, will be able to transfer in.
More than the bonus you received. The 25% withdrawal charge applies to the whole balance including the bonus, while the 25% bonus was added only to what you paid in. Put in £1,000 and it becomes £1,250. Withdraw it outside the rules and the 25% charge takes £312.50, leaving £937.50. You are £62.50 down on your own money, a loss of 6.25%.
Not financial advice. This page reports what the HM Treasury consultation says and what the current Lifetime ISA rules are. It is not a recommendation to open, keep or close any account. The consultation is open until 18 August 2026 and the final design of the First Time Buyer ISA, including the bonus rate, contribution limit and property price cap, has not been announced. Rules can change. Sources: First Time Buyer ISA consultation, HM Treasury, gov.uk Lifetime ISA, UK tax rates 2026/27.