New First Time Buyer ISA Launches on 6th April 2029

Last checked: 7th November 2026

This guide explains how the new First Time Buyer ISA is expected to work, who may be able to open one, and what it could mean if you already have a Lifetime ISA or Help to Buy ISA.

What is the new First Time Buyer ISA?

The First Time Buyer ISA is a new tax-free savings account designed to help people build a deposit for their first home. The government will add a 25% bonus when the account is used towards an eligible first-home purchase. The bonus is based on how much is in the account when you take the money out to buy your home.

It is intended to take the place of the Lifetime ISA for people opening a new first-home savings account from April 2029. The main idea is similar: save towards a deposit and receive a government top-up. The new account will not have the Lifetime ISA’s withdrawal charge. You will be able to take out your own savings without paying a penalty. However, you will only get the government bonus if you use the money to buy a home that meets the rules.

Who will be eligible for a First Time Buyer ISA?

The account is for people buying their first home. The plans say you must be at least 18 to open one, but there is no upper age limit. The home must be in the UK, cost £450,000 or less, and be somewhere you intend to live. You cannot use it to buy a rental property or a second home.

The full rules will be published before the account launches. Current plans say you may need to have had the account for at least 12 months and use a mortgage to buy the property. These details are not final yet.

How much can you save and how much is the bonus?

You will be able to pay in up to £4,000 each tax year. When you use the account to buy a home that meets the rules, the government will add a 25% bonus. The most you can receive is £20,000.

If you paid in the full £4,000 every year, it would take 20 years to save £80,000, before interest or investment returns. Any interest or growth could help you reach that amount sooner. Banks and building societies have not yet announced all the details of the accounts they will offer.

Which homes will qualify?

The government has confirmed that the £450,000 property price cap will continue to apply. The account is intended for a first home that you will live in, rather than a buy-to-let property or a second home. The government will publish the full rules before the account launches.

The £450,000 limit applies across the UK. It is not a higher London limit for the new account. This matters particularly in areas where typical first-home prices are close to or above the cap.

What happens to the Lifetime ISA?

The Lifetime ISA will close to new savers when the First Time Buyer ISA launches. Existing Lifetime ISA holders will not have to close their accounts. They can carry on paying into their Lifetime ISAs and using them under the current rules.

You will not be able to transfer Lifetime ISA savings into the new account. This is because the Lifetime ISA already has its own government bonus. You may still be able to use both accounts to buy the same home, as long as you meet the rules for each one.

There is also a separate change for Lifetime ISA holders buying a property above the £450,000 cap. From 29th October 2026, the withdrawal charge for an otherwise qualifying first-home purchase above that limit falls from 25% to 20%. The property price cap itself has not increased. The separate withdrawal charge change is explained in our related guide below.

Can two people use a First Time Buyer ISA to buy the same home?

Yes. Each person has their own account. If two eligible first-time buyers buy a home together, they can each use their own account and bonus towards the purchase. The £450,000 price limit applies to the property, not to each buyer.

You may still be able to use your account if you buy with someone who has owned a home before, as long as you meet the first-time buyer rules. That person would not qualify to open their own account.

Can you transfer a Help to Buy ISA?

Yes. If you have a Help to Buy ISA, the government has confirmed that you will be able to transfer its full balance into a First Time Buyer ISA between 6th April 2029 and 1st December 2030. This transfer will not count towards the new account’s £4,000 yearly payment limit.

You will only have this period to make the transfer. If you have a Help to Buy ISA, ask your bank or building society how to move the money once the new accounts are available. The exact process has not been published yet.

Can you transfer money from another ISA?

You will be able to move up to £4,000 from other types of ISA into the new account. You can move any amount out of a First Time Buyer ISA. You can only have one First Time Buyer ISA at a time, so you will need to transfer it if you want to change provider.

Will there be an age limit?

The government has confirmed that the new account will have no upper age restriction. This is a change from the Lifetime ISA, which can only be opened by people aged 18 to 39. The government’s published summary confirms the removal of the upper age limit, although the full eligibility rules, including the detailed definition of a first-time buyer, will be set out before launch.

How and when will the government bonus be paid?

The bonus is based on the eligible balance in the account when you make a qualifying purchase, rather than being added each month as you save. The published design says the bonus will be calculated on the final account balance, up to the £20,000 maximum.

The planned process is for the account funds and bonus to be claimed as part of the conveyancing process when you buy your home. The precise forms, timings and any provider or conveyancer charges will depend on the final rules and arrangements. These details have not all been confirmed, so check the process with your ISA provider and solicitor once the accounts become available.

Can you withdraw your savings for something else?

The new account is designed to let you withdraw your own money without a withdrawal penalty. The 25% government bonus is only paid when the balance is withdrawn for an eligible first-home purchase. If you take money out for another reason, you will not receive the bonus on that amount.

This is different from the Lifetime ISA, where an unauthorised withdrawal normally attracts a 25% charge. That charge can mean you receive less than you originally paid in. The new account removes that penalty, but it also means the government bonus is tied to using the savings for a qualifying home purchase.

Lifetime ISA or First Time Buyer ISA: what is the difference?

The new account will share some features with the Lifetime ISA, including the 25% government bonus and £4,000 annual contribution limit. However, the way the bonus is paid and the rules for accessing your savings will be different.

Existing Lifetime ISA holders can keep their accounts after April 2029. You will not be able to transfer a Lifetime ISA into the new account, but both accounts can be used towards the same qualifying purchase if you meet the rules.

Should you wait for the new ISA or open a Lifetime ISA now?

That depends on when you hope to buy and how much flexibility you need. The new account will not be available until April 2029. If you want to start saving before then, a Lifetime ISA remains available to eligible people until the new product launches. Existing Lifetime ISA accounts will continue after April 2029.

There are important differences to weigh up. A Lifetime ISA pays its bonus into the account as you save, can be used for retirement from age 60, and has a 25% withdrawal charge for most withdrawals that do not meet the rules. The First Time Buyer ISA will pay its bonus when the money is withdrawn for an eligible home purchase, has no upper age limit and will not apply a withdrawal penalty to your own savings.

If you already have a Lifetime ISA, you do not need to transfer it. You will be able to keep it and, subject to the rules, use it alongside a First Time Buyer ISA. You should compare the rules and your likely buying timescale before deciding where to put new savings.

What do you need to do now?

You do not need to apply for anything yet. The new accounts are not due to launch until 6th April 2029, and banks and building societies still need time to prepare their products. If you are saving for a first home now, check the current Lifetime ISA rules and consider whether the withdrawal conditions suit your plans. If you have a Help to Buy ISA, keep an eye on the transfer window that is due to run from April 2029 to December 2030.

More detailed rules and provider information are expected before launch. We will update this guide when the government publishes the legislation and practical arrangements.

When does the First Time Buyer ISA start?

It is due to launch on 6th April 2029, the start of the 2029-30 tax year.

How much is the First Time Buyer ISA bonus?

The government will add a 25% bonus based on the final account balance when you withdraw it for an eligible first-home purchase. The maximum bonus is £20,000.

How much can I pay into the account each year?

You will be able to contribute up to £4,000 each tax year. Transfers from other ISAs count towards a separate £4,000 transfer limit described in the government’s published design.

Can I keep my Lifetime ISA after April 2029?

Yes. Existing Lifetime ISA holders can continue contributing to and using their accounts under the current rules. The new account replaces the Lifetime ISA for new savers, not for people who already hold one.

Can I transfer my Lifetime ISA into the new account?

No. Transfers from Lifetime ISAs into First Time Buyer ISAs will not be permitted. You can, however, use both accounts towards the same eligible home purchase.

Can I transfer my Help to Buy ISA?

Yes. The full balance can be transferred between 6th April 2029 and 1st December 2030, outside the £4,000 annual contribution limit.

Is there a property price limit?

Yes. The confirmed price cap is £450,000 across the UK.

Can I withdraw money without buying a home?

You will be able to withdraw your own savings without a withdrawal penalty, but you will not receive the government bonus unless the money is used for an eligible first-home purchase.