First-time buyers have been promised a new savings account, the First Time Buyer ISA, which is designed to simplify saving for a house deposit. This proposed account is expected to replace the existing Lifetime ISA (LISA) and would offer a government bonus without a withdrawal charge if funds are accessed early.
However, the First Time Buyer ISA is not currently available. The government launched a consultation in June 2026, inviting responses until 17 August 2026. Key details, such as the annual savings limit, the bonus size, and the maximum property price, are still under discussion.
In the interim, eligible savers can still open a Lifetime ISA. This account allows contributions of up to £4,000 per year, attracting a 25% government bonus of up to £1,000 annually. The Lifetime ISA was introduced in 2017 to assist with first home purchases and retirement savings, but its withdrawal penalty has caused some savers to lose part of their original savings.
Jasmine Birtles, founder of MoneyMagpie, stated, "It is right to deal with the withdrawal penalty because too many people have discovered that a product described as a helping hand can take back part of their own savings when their circumstances change. But first-time buyers should not confuse a promising consultation with an account they can actually use today."