Key differences at a glance
The Lifetime ISA lets you pay in up to £4,000 a year and adds a 25% bonus on top, so the most you can earn is £1,000 a year. The Help to Buy ISA limited you to £200 a month and a total bonus of £3,000. For a property purchase, the LISA bonus has no overall lifetime cap.
The LISA bonus goes into your account every month, so it can pick up interest or investment growth while it sits there. The Help to Buy ISA bonus only arrives at the point of purchase, paid through your solicitor. That gap in timing can shape how you plan your deposit.
Property price limits
Both schemes cap the property price at £450,000. The Help to Buy ISA, though, drops to £250,000 for homes outside London. The Lifetime ISA keeps the £450,000 limit across the whole country, which gives buyers in pricier areas more room to work with.
If you are buying outside London for somewhere between £250,001 and £450,000, the Lifetime ISA bonus still counts while the Help to Buy ISA bonus does not. For buyers across much of southern England, that difference matters.
Can you have both?
You are allowed to hold a Help to Buy ISA and a Lifetime ISA at once, but only one bonus can go towards a given property. You cannot claim both on the same purchase.
When you hold both, the Lifetime ISA bonus is usually the one to claim, since it tends to be the bigger of the two. You can still draw your Help to Buy ISA savings and put them towards the purchase. The bonus just will not apply to that money.
Withdrawal penalties
Take money out of a Lifetime ISA for any reason other than buying your first home or reaching retirement after age 60, and a 25% penalty applies. In practice that wipes out the bonus and takes a further 6.25% of your own savings.
The Help to Buy ISA carries no such penalty. You can withdraw at any time and keep every pound you saved, though the government bonus is lost if the money is not going towards a qualifying property.