Best Lifetime ISA: 2025 Expert Comparison

Saving for your first home or retirement is a big financial goal, and finding the right savings plan can be overwhelming. With so many options out there, it’s easy to feel unsure about where to put your money.

A Lifetime ISA (LISA) could be the perfect solution, offering a 25% government bonus on your contributions. But with various providers and account types to choose from, how do you know which one will give you the best return on your investment?

In this article, we’ll compare the best Lifetime ISAs available in 2025. We’ll break down the features, benefits, and potential drawbacks of each option, helping you identify the perfect solution to align with your savings goals.

Lifetime ISAs can be complex. Let's look at some of the best options so you can make an informed choice.

Our expert score: 4.9/5

Pros

Cons

As the UK's top-rated Lifetime ISA provider, Moneybox is a great option for first-time buyers aiming to grow their savings. You can choose between a Cash or a Stocks and Shares LISA, with the Cash LISA being the recommended option for first-time buyers.

Opening a LISA is simple—just download the app and deposit at least £1. For the first year, you’ll earn a rate of 4.70% AER (variable), dropping to 3.55% thereafter—this isn’t a fixed rate ISA. However, the account must be open for 12 months before you can use it for a house purchase, and it’s not counted as ‘open’ until you’ve made your first deposit.

There are no fees to open a Moneybox Cash LISA, and your funds are held with third-party banks protected by the Financial Services Compensation Scheme (FSCS) up to £85,000.

Why buy? Expert verdict

Moneybox’s user-friendly app allows you to open an account in minutes, making it very easy to get started.

Once in, users can enjoy additional features such as a mortgage calculator, deposit calculator, and even a LISA time machine that can show you how your LISA might perform over the next 10 years. In our opinion, useful home-buying tools such as these make it the best Lifetime ISA for first-time buyers.

In addition to this, Moneybox users can head to the ‘learn’ tab within the app for wealth management tips and tools, making the whole process feel much more accessible for those with no prior knowledge. Boasting a 4.5-star rating on Trustpilot and named as a Which? Recommended Provider in November 2024, Moneybox is a solid winner for first-time buyers looking to open a Lifetime ISA.

Our expert score: 4.5/5

Pros

Cons

AJ Bell’s Stocks and Shares ISA offers a wide choice of investment options, with over 2,000 funds, 450 investment trusts, thousands of shares in companies on UK and international markets, and a range of exchange-traded funds (ETFs).

You can open your account in 10 minutes directly from the website, and the dedicated iOS and Android apps allow you to view and manage your account on the move.

AJ Bell is listed in the FTSE 250, so it’s reassuring to know you’ll have one of the UK’s largest and most secure ISA providers behind you. You can grow your ISA gradually, starting with as little as £25 a month, or open it with a one-off lump sum of £250.

You’ll never pay more than 0.25% on the investments in your account, and you can buy or sell investments as cheaply as £1.50. Live UK prices also allow you to buy and sell when it's right for you.

Why buy? Expert verdict

With AJ Bell’s Stocks and Shares ISA, you can either manage your portfolio yourself, choose from its range of ready-made investment ideas, or have an expert manage your funds for you. Options such as this make it ideal for both beginner and expert investors.

The account takes about 10 minutes to set up, and while there is an app, it looks like this needs to be done directly from the website. You can also withdraw your money whenever you like, with it arriving in your bank account 1-3 working days later. However, this money can’t be paid back into your ISA if you’ve reached the annual limit for that tax year, so keep that in mind if you're moving money about. Compared to competitors, AJ Bell has lower monthly fees. For instance, you’ll never pay more than £3.50 a month on your custody charge or more than 0.25% on your funds. Similarly, it costs just £1.50 to buy or sell funds and £5 to buy or sell shares.

As the Which? Recommended Provider for Stocks & Shares ISA 2024 and with an ‘excellent’ rating (4.8 stars) on Trustpilot, AJ Bell feels like a secure and trustworthy provider for investing. Plus, all AJ Bell customers enjoy full access to the free Shares investment magazine, which is a nice touch. All of this makes AJ Bell a solid provider for the best Stocks and Shares Lifetime ISA.

Our expert score: 4.2/5

Pros

Cons

Hargreaves Lansdown (HL) Stocks and Shares ISA provides access to over 8,000 shares and more than 3,000 funds, ETFs, and investment trusts for customers to invest in. It also provides a Wealth Shortlist of recommended funds, ready-made portfolios, and financial advice services to help beginners get started.

While fees may appear more costly than some competitors, these are tiered. For funds, the charge is 0.25% per year on your portfolio's first £1 million, 0.1% on amounts between £1-2 million, and no fees for balances over £2 million. For shares, the annual fee is 0.25% (capped at £45), with an additional £45 for funds. Any uninvested cash also earns up to 3.7% interest.

It’s worth noting that each fund has its own management fees, and share trades incur an £11.95 charge unless you’ve made 10 or more trades in the previous month.

Your HL LISA can be managed online, through the app, or by phone, with UK-based customer support available 6 days a week.

Why buy? Expert verdict

As a FTSE 100 company and the ‘UK’s #1 investment and savings platform,’ Hargreaves Lansdown is a great option for those looking to save for their retirement. You can open a Stocks and Shares ISA with a minimum of £100 or start investing with just £25 per month.

While some fees can appear higher than those of competitors, it’s good to know there are no fees when buying or selling funds. You can withdraw your money at any time, with funds arriving in your bank account the same day or the next working day. However, if you’ve reached the annual limit for the tax year, you can't pay the money back into your ISA, so be mindful when transferring funds.

Rated ‘great’ on Trustpilot with a 4.2-star rating, HL is a reputable name that we believe provides one of the best Lifetime ISAs for retirement.

✍️ Have you used this Lifetime ISA? Share a rating and review for Hargreaves Lansdown on Review Centre, and check out what others have to say.

The two main types of Lifetime ISAs are Cash LISAs and Stocks and Shares LISAs. Both LISAs come with the same contribution limits and a government bonus of 25%, but choosing between them depends on your financial goals and how much risk you’re open to—we’ll explain this below.

Cash Lifetime ISA

A Cash LISA works like a high-interest savings account. Your money earns tax-free interest in a low-risk account, making it ideal for those who prefer stability and want to protect their savings from market fluctuations. As a result, the returns may be lower than those from a Stocks and Shares LISA.

It’s important to note that you can also open a Cash ISA, which is a different type of account. While a Cash Lifetime ISA offers a government bonus and is intended for first-time buyers or retirement savings, a Cash ISA is simply a tax-free savings account that can be used for any savings goal.

Stocks and Shares Lifetime ISA

A Stocks and Shares LISA allows you to invest in a range of assets, such as stocks, bonds, or funds. This type of LISA offers the potential for higher returns over the long term, but it comes with more risk due to market volatility. Stocks and Shares LISAs are suited to those who are comfortable with risk and are looking to invest long-term, typically for retirement. To get the best ISA rates as you age, leaving your money for a minimum of 5 years is recommended.

The type of LISA you need will very much depend on your financial goals. Are you looking to invest for the long term, or do you envision using this money towards the purchase of your first house in the next year or two?

If the answer is the former, a Stocks and Shares LISA can allow you to grow your savings over a longer period of time, letting you acquire far more when you come to retire.

However, if the latter—and you envision needing the money sooner—a Cash LISA can keep your money secure while still gaining interest.

Let’s explore how Lifetime ISAs work.

Anyone aged 18-39 can open a Lifetime ISA. You can save up to £4,000 annually, either for purchasing your first home (costing up to £450,000) or for retirement, with the government adding a 25% bonus of up to £1,000 per year.

For the 2024/2025 tax year, you can put up to £20,000 in an ISA. This amount can be split across different ISAs—such as a Cash ISA, Stocks and Shares ISA, and Lifetime ISA—but the total amount across all ISAs should not exceed £20,000.

A Lifetime ISA offers a bonus of up to £1,000 per year from the government, helping you save for your first home or retirement. LISAs provide tax-free growth on your savings, usually with high interest rates and unique investment opportunities, making them a great long-term savings tool for those under 39.

It’s important to note that a 25% penalty applies if you withdraw your money from a Lifetime ISA for any reason other than for the purchase of a first home or for retirement.Similarly, your account must be open for 12 months before you can use the money to buy a house—and it usually won’t count as ‘open’ until you’ve made your first deposit.

You can open a LISA with a bank, building society, or online provider. Choose which type you’d like and head to the provider’s website to input your personal details and set up regular contributions to your account.

Here are some of the most prominent LISA providers in the UK, each catering towards different preferences and financial goals.

Moneybox: This digital-first platform has become the UK's largest provider of LISAs, boasting over a million customers. It offers both Cash Lifetime ISAs and Stocks and Shares LISAs.

Paragon Bank: Known for its straightforward approach to savings, Paragon Bank offers Cash LISAs with attractive interest rates and flexible terms.

Hargreaves Lansdown: As one of the UK's biggest investment platforms, Hargreaves Lansdown offers both Cash and Stocks and Shares LISAs. It provides a variety of investment options and is known for its comprehensive customer service.

AJ Bell: A Financial Times Stock Exchange (FTSE) 250 company, AJ Bell offers Stocks and Shares LISAs with many investment options, making it suitable for both beginner and experienced investors.

Before you open your Lifetime ISA, here are a few things to consider:

Determine your goals: Decide whether you're saving for your first home or retirement—this will help you decide between a Cash or a Stocks and Shares LISA.

Compare interest rates and investment returns: If you’re opening a Cash LISA, compare interest rates between providers. For a Stocks and Shares LISA, look at historical returns and the risk levels of the available investment options.

Fees: While Cash LISAs typically have no fees, Stocks and Shares LISAs can charge for services such as account management. Review any fees and compare these among providers.

Reputation and reviews: Take the time to research your provider to ensure it’s reliable and trustworthy. Check its customer reviews and ensure it provides reliable customer service.

Consider flexibility: Check if the LISA offers flexible features, such as the ability to change your investments or make additional contributions easily. Look into the charges that may occur if you need to withdraw your money earlier than expected.

The Lifetime ISA options provided within this article were determined after thorough research and in-depth comparisons. We also considered the factors below.

Interest rates and charges: We looked at interest rates and compared them to determine the best return on investment. We also weighed them up against any potential charges from the provider.

Reputation and reviews: We delved into customer reviews and ensured there was a high satisfaction rate among users. We also ensured each provider was well-known and established.

Personal experience: Where possible, recommendations are made from personal experience, with reviewers often having an account with a provider themselves.

The best Lifetime ISA rates vary, but as of 2025, LISAs typically offer interest rates of around 4%-5%. Stocks and Shares LISAs can offer potentially higher returns but can come with more risk, depending on market performance. It’s best to always compare providers for the latest rates and terms.

For every tax year you deposit money into your ISA, you’ll receive a 25% bonus of up to £1,000 (if depositing the full £4,000 allowance). However, the bonus is based on contributions and isn’t a guaranteed annual return on your balance.

A LISA is definitely worth it if you're saving for your first home or retirement, as the 25% bonus on your contributions can help your money grow faster. However, if withdrawn early for reasons other than home-buying or retiring, there are penalties.

Choosing the best Lifetime ISA depends on your financial goals, timeframe, and the level of risk you're comfortable with. A Cash LISA with competitive interest rates might be ideal for those seeking low-risk options, while a Stocks and Shares LISA offers greater potential for longer-term growth.

Providers such as Moneybox, AJ Bell, and Hargreaves Lansdown stand out for their variety of investment choices, user-friendly platforms, and strong customer service. Ultimately, it's important to compare fees, features, and investment options to find the right LISA to align with your savings strategy and future plans.