Lifetime ISA showdown 2025: which bank pays the biggest bonus?

Dreaming of ditching your uni halls or parents’ house for a place of your own? That’s valid. But that deposit feels like a distant, almost impossible dream, right? Wrong! Getting on the property ladder might be closer than you think, thanks to a massive government cheat code: the Lifetime ISA (LISA).

Seriously, this is a game-changer. For every £4 you save, the government literally hands you £1 for free. It’s a 25% bonus on your savings, up to a whopping £1,000 every single year. Let that sink in. FREE. MONEY.

But which bank or app gives you the best deal? Don’t sweat it, we’ve done the homework for you. Welcome to the Lifetime ISA Showdown 2025.

What's a Lifetime ISA and why should I care?

Want the short version? A Lifetime ISA (or LISA) is a special savings account designed to help anyone aged 18 to 39 buy their first home or save for retirement. Don't just take our word for it–listen to the big man himself, Martin Lewis, explain why it's a no-brainer.

Here’s the TL;DR:

• You can save up to £4,000 each tax year.
• The government adds a 25% bonus on top of whatever you save.
• Max out your £4k savings, and you get a £1k bonus. Every. Single. Year.
• You can open one from age 18 up until the day before your 40th birthday.
• The money can be used to buy your first home (worth up to £450,000) or can be accessed penalty-free after you turn 60.

It’s basically the government helping you build that house deposit way faster than you could on your own.

Finding the cash: tips for hitting your £4k goal

Okay, saving up to £4,000 a year on a student budget can sound intimidating. But it’s more doable than you think. The first step is getting your finances organised. Nailing your student banking is essential, from picking the best student bank account with a good overdraft to understanding how student credit cards work.

Once you’re set up, you can find loads of clever ways to save money as a student that you haven't even thought of. Learning how to get the best out of student banking can make your loan stretch further, freeing up cash for your LISA.

Cash vs Stocks & Shares LISA: choose your fighter

Before you dive in, you’ve got a choice to make. LISAs come in two flavours:

1. Cash LISA: this is just a simple savings account. You put your money in, it earns a set interest rate, and you get the 25% government bonus. It’s low-risk, straightforward, and perfect if you’re planning to buy a house in the next few years.
2. Stocks & Shares LISA: with this one, your money is invested in the stock market. This means it has the potential to grow much faster, but its value can also go down. It's a higher-risk option, better suited for long-term goals.

Our take? If you’re saving for your first home deposit, a Cash LISA is almost always the safer bet.

The 2025 LISA showdown: meet the contenders

Finding the best Lifetime ISA providers can feel like a chore, but they all offer slightly different perks. Here’s a rundown of the big players:

• For the app-savvy saver: Moneybox
  The famous ‘round-ups’ feature makes saving effortless. It rounds up your spending to the nearest pound and saves the spare change. It adds up FAST.
  
• For the reliable rate-chaser: Beehive Money or Skipton Building Society These building societies often offer consistently good interest rates. They provide a simple, no-fuss home for your savings.
  
• For the pro saver: Tembo
  A mortgage broker that also offers a market-leading Cash LISA. The big win is that when you’re ready to buy, they can also help you find a mortgage.

The scary bit: withdrawal penalties

This part is important. The LISA is designed for buying your first home or for retirement. If you take money out for any other reason, you get hit with a 25% withdrawal charge. This means you lose the government bonus and a chunk of your own savings. Ouch. Only put money into a LISA if you’re dead-set on its intended purpose.

Want more money advice?

Getting your head around money can feel like… a lot. If you want to level up your knowledge, plugging into a podcast is an easy win. Check out The Martin Lewis Podcast on BBC Sounds for weekly tips, or tune into BBC Radio 4's Money Box for deep dives into all kinds of money matters.

Ready to start? Here’s how

Getting your LISA set up is surprisingly easy:

1. Choose your provider: pick one from our showdown list or do your own research
2. Apply online or via their app: you'll need your National Insurance number handy
3. Add some money: you can start with as little as £1
4. Watch the bonus roll in: the government pays the bonus about 4-6 weeks after you deposit your money

And that’s it! You're officially savings and slaying on the road to your first home. Winning!!!