Lifetime ISA Bonus Calculator: Why LISAs Beat Help to Buy ISAs in 2025

Buying your first home is one of the biggest financial milestones you’ll ever face, and in the UK, government-backed ISAs have been a popular way to make that goal more achievable. Over the last decade, two main products have stood out for first-time buyers: the Help to Buy ISA and the Lifetime ISA (LISA). While the Help to Buy ISA closed to new applicants in 2019, many people still save into them, and with property prices continuing to rise in 2025, the question remains: which ISA actually gives better returns today?

Both schemes offer a 25% government bonus on your savings, but the rules, contribution limits, and benefits differ significantly. For new savers, the Lifetime ISA is the only option available, but understanding how it compares to the older Help to Buy ISA is key to making smart financial choices. This is where tools like a Lifetime ISA Bonus Calculator come in handy. By showing how much bonus you can earn based on your contributions and time horizon, these calculators make it easier to compare the two schemes and decide which works best for your savings goals in 2025.

What Is a Help to Buy ISA?

The Help to Buy ISA was introduced by the UK government in 2015 to support first-time buyers struggling to save for a deposit. While it closed to new applicants in November 2019, those who already opened one can continue to save into it until November 2029, and claim the government bonus by 2030. Here’s how it works: savers can deposit up to £200 per month, after an initial lump sum of £1,200 in the first month. The government then adds a 25% bonus to the total saved, up to a maximum of £3,000. This means if you save £12,000, you’ll receive an extra £3,000 from the government, giving you £15,000 to put toward your first home.

One limitation of the Help to Buy ISA is the property value cap. Outside of London, you can only use it for homes up to £250,000, while in London, the cap is £450,000. With rising house prices in 2025, this restriction has become a major drawback for many savers. Another key detail is how the bonus is paid. Unlike the Lifetime ISA, the Help to Buy bonus isn’t added to your account balance while saving. Instead, it’s applied at the time of purchase, directly towards your deposit. This makes it less flexible compared to the Lifetime ISA, which pays bonuses monthly and allows the funds to grow alongside your savings.

What Is a Lifetime ISA?

The Lifetime ISA (often called a LISA) is a government-backed savings account introduced in 2017 to help people save either for their first home or for retirement. Unlike the Help to Buy ISA, which is closed to new savers, the Lifetime ISA is still open and available to anyone aged 18 to 39. Once opened, you can keep contributing until you turn 50. You can save up to £4,000 per tax year into a Lifetime ISA, and the government will add a 25% bonus on top of whatever you contribute. This means you could earn up to £1,000 in a government bonus each year, significantly more than the Help to Buy ISA ever allowed. The bonus is applied monthly, meaning your savings benefit from interest or investment growth on both your contributions and the added government money.

Funds can be used in two ways: to purchase your first home (valued up to £450,000 anywhere in the UK) or to support your retirement after age 60. However, if you withdraw money for any other reason before 60 (and not for a first home), you’ll face a 25% withdrawal penalty. Because of these rules, planning contributions is crucial, and this is where a Lifetime ISA Bonus Calculator becomes extremely useful. By entering your expected contributions and timeframe, you can estimate the total bonus you’ll receive and better plan how to maximize your savings. Visit fincalc.uk.

Key Differences Between Lifetime ISA and Help to Buy ISA

While both the Help to Buy ISA and  Lifetime ISA Bonus Calculator offer a 25% government bonus, the way they work and the benefits you can gain differ in several important ways.

  1. Contribution Limits
     The Help to Buy ISA limits you to £200 per month (after an initial £1,200 deposit). In contrast, the Lifetime ISA allows contributions of up to £4,000 per tax year, giving you the potential to save and earn bonuses much faster.
  2. Maximum Bonus
     The Help to Buy ISA caps the total government bonus at £3,000. The Lifetime ISA, however, provides up to £1,000 bonus per year until age 50. Over time, this means you could accumulate tens of thousands of pounds in bonuses, far more than the Help to Buy ISA ever offered.
  3. Property Price Limits
     Help to Buy ISAs restrict purchases to homes worth up to £250,000 (or £450,000 in London). Lifetime ISAs allow purchases of homes worth up to £450,000 anywhere in the UK, which is far more realistic given rising property prices in 2025.

4. When the Bonus Is Paid
 With a Help to Buy ISA, the bonus is only added at the time you purchase a property, meaning your savings don’t benefit from the government money until the end. In a Lifetime ISA, the bonus is paid monthly, which allows your balance, including the bonus, to grow with interest or investment returns.

Which One Gives Better Returns in 2025?

When comparing the Help to Buy ISA and the Lifetime ISA in 2025, the Lifetime ISA almost always comes out ahead in terms of returns, especially for new savers. The main reason is the contribution and bonus structure.

With a Help to Buy ISA, the maximum government bonus is £3,000, no matter how long you save. Even if you hit the monthly cap of £200 consistently, it would take several years to reach that limit. By contrast, the Lifetime ISA allows up to £4,000 in contributions each year, with a 25% bonus of up to £1,000 annually. Over just three years of full contributions, that’s already £3,000 in bonuses, the same as the Help to Buy ISA’s lifetime maximum. And if you keep contributing, the gap grows significantly.

Conclusion:

Both the Help to Buy ISA and the Lifetime ISA were designed to make buying a first home more achievable, but in 2025, the Lifetime ISA generally provides far better returns and flexibility. While existing Help to Buy ISA holders can still benefit from the government bonus, the strict property limits and lower overall bonus potential make it less attractive compared to the Lifetime ISA.

With higher annual allowances, more generous bonuses, and a broader property value cap, the  Lifetime ISA Bonus Calculator is now the stronger option for most savers. Tools like a Lifetime ISA Bonus Calculator make it easier to see how much you could earn, helping you plan contributions and maximize savings. Whether you’re aiming for a first home or long-term retirement security, the Lifetime ISA offers a more powerful and future-proof way to grow your money.

FAQs

1. Can I still open a Help to Buy ISA in 2025?

No, Help to Buy ISAs closed to new applicants in November 2019. However, if you already have one, you can continue saving into it until November 2029 and claim the bonus by 2030.

Yes, you can hold both accounts, but you can only use the government bonus from one of them when buying your first home. Many savers choose to keep their Help to Buy ISA active while also opening a Lifetime ISA for higher contributions and bonuses.

The Help to Buy ISA offers a maximum bonus of £3,000. The Lifetime ISA can give you up to £1,000 per year until age 50, meaning the potential bonus over time is far greater.

 A Lifetime ISA Bonus Calculator lets you input your planned contributions and time horizon to estimate your total government bonus and savings growth. It’s an easy way to compare scenarios and see how much more you could earn versus a Help to Buy ISA.