The best thing about Lifetime ISAs? You can put up to £4,000 into a Lifetime ISA every tax year and the government will top it up by 25%, all the way up to £1,000.

So if you’re really dedicated, and have the cash to do it, you could be growing your first home fund by £5,000 a year – £4,000 of your money, plus £1,000 from the government.

Just remember, you can only put up to £20,000 into all of the different ISA accounts in your name per tax year. That overall £20,000 per year limit applies to any Help to Buy ISAs, regular ISAs or Lifetime ISAs that you have.

Ok, if you’ve already put £17,000 into a regular ISA this tax year for example, you can put a max of £3,000 into a Lifetime ISA.

Give me some bonus examples!

The good thing is, you don’t have to max out your Lifetime ISA at £4,000 every year to see that bonus land in your account. The government gives you 25% on anything you put into your Lifetime ISA, so if in any tax year you were to put...

💰 £100 in? You’ll get £25 in bonuses.

💰 £875.68 in? You’ll get £218.92 in bonuses.

💰 £3,200 in? You guessed it! You'll get £800 in bonuses.

You might be aiming to top it up as much as you can to squeeze more from the bonus, but it’s completely up to you.

Here are some examples you can use as a ballpark ⚾️

P.s. These are totally fictional characters and scenarios.

Charithra maxed out her Cash Lifetime ISA every year

Yes Charithra! She has saved £4,000 in her Cash Lifetime ISA every year for the last 4 years, and is now ready to buy her first home! Here's how she got there...

🗓️ Year 1

  • Money in: £4,000
  • Government bonus: £1,000

🗓️ Year 2

  • Money in: £4,000
  • Government bonus: £1,000

🗓️ Year 3

  • Money in: £4,000
  • Government bonus: £1,000

🗓️ Year 4

  • Money in: £4,000
  • Government bonus: £1,000

Total money in: £16,000

Total government bonus: £4,000

💰 Total LISA value to put towards her first home: £20,000 - plus any interest earned over the 4 years she’s been saving 💰

Alex skipped a year (and is back on track!)

A while ago, Alex was finding it difficult to put money towards their first home, so they pressed pause on their savings. Now, Alex’s in a better position and can put money into their Cash Lifetime ISA again.  Here's what they did...

🗓️ Year 1

  • Money in: £4,000
  • Government bonus: £1,000

🗓️ Year 2

  • Money in: £0
  • Government bonus: £0

🗓️ Year 3

  • Money in: £2,900
  • Government bonus: £725

🗓️ Year 4

  • Money in: £4,000
  • Government bonus: £1,000

🗓️ Year 5

  • Money in: £3,600
  • Government bonus: £900

Total money in: £14,500

Total government bonus: £3,625

💰 Total LISA value to put towards their first home: £18,125 - plus any interest earned over the 5 years 💰

Ellie had a setback, but is determined to keep going

Ellie’s been saving for a few years now, and has been popping away all of her spare pounds & savings into her Lifetime ISA. Last year, Ellie’s dog had an accident, and her insurance company didn’t pay out for the full vet bills – so she had to withdraw some money out of her Lifetime ISA.

🗓️ Year 1

  • Money in: £2,900
  • Government bonus: £725

🗓️ Year 2

  • Money in: £3,200
  • Government bonus: £800

🗓️ Year 3

  • Money in: £0
  • Government bonus: £0
  • Withdrawn to help with the vet bills: £875
  • Early withdrawal charge claimed back by the government: £218.75 (applied to withdrawals that aren’t eligible aka not for the purposes of; buying a house under £450k in the UK, after the account’s been open for 12 months; if you are aged 60 or over when you can use it for anything charge-free; or if you are terminally ill)

🗓️ Year 4

  • Money in: £200
  • Government bonus: £50

Total money in: £6,300

Total bonus received from the government: £1,575

Money withdrawn: £1,093.75 (£875 for the vet bills plus the £218.75 penalty)

💰 Total LISA balance to put towards her first home: £7,875, plus any interest Ellie's had added to her account 💰

Ben’s using his Lifetime ISA as a secondary savings account

Ben’s main priority is to build an emergency fund, which he keeps in an easy-access savings account, but he still wants to make progress towards buying his first home. So, over the last few years, he has set up a small direct debit into his Lifetime ISA, and he’s been topping it up every now and then with extra cash he makes on Depop.

🗓️ Year 1

  • Money in: £600
  • Government bonus: £150

🗓️ Year 2

  • Money in: £350
  • Government bonus: £87.50

🗓️ Year 3

  • Money in: £790
  • Government bonus: £197.50

Total money in: £1,740

Total government bonus: £435

💰 Total LISA value:  £2,175 - plus any interest Ben got over the 5 years 💰


Stocks & Shares Lifetime ISAs

You'll notice all the examples above are for cash Lifetime ISAs. With a stocks & shares Lifetime ISA, you get the 25% government bonus on what you put in, plus any returns on the value of the stocks and shares your money’s invested in. This can go up as well as down though, so we haven’t provided any examples here.

If you want to find out if this type of Lifetime ISA is for you, check out this blog.


How do I figure out how much money I should put into my Lifetime ISA?

Setting a goal is step number #1 in the Nude app. And to set a first home goal, there are a couple things you want to know.

  1. Your first home budget (if you’re not sure, you can use our Home Finder that pulls in real-life house prices by area or postcode).
  2. The % of a deposit you want to put towards your home (you’re typically looking at 10% — 25% if you’re a first-time buyer, but it’s a great idea to have a chat to a mortgage broker first to see if this is realistic for you).
  3. How long it’s going to take (our app does all the maths for you and wraps it up neatly into a Time to Buy based on your goal, your saving capabilities and more).

From there, you can prioritise what’s most important to you. If you have a budget in mind, you can break it down year by year. Here are a couple of ways to do that...

🗓️ Divide it by years

If you know you want to be a homeowner in the next 4 years, you just divide your deposit goal by 4.

For example, £20k deposit needed over 4 years = £5k in your Lifetime ISA every year, which would mean you'd have to max it out in order to get the full bonus.

This will help you figure out how much you should put into your Lifetime ISA every year (remember though, the yearly limit of how much you can put in is £4,000 + the max bonus each year is £1,000).

💸 Divide it by £5,000

It might also help to divide your deposit goal by £5,000 (aka the max you can grow your Lifetime ISA by each year with your money + the bonus).

So if you want to have £25,000 aside, this would be 5 years of maxing out a Lifetime ISA and getting the max bonus amount.

After that, it’s our job to help you get there.

We’ll give you tools to keep track of your money, a cash Lifetime ISA or a stocks & shares Lifetime ISA that come with those 25% bonuses we mentioned, plus personalised money-saving ideas that can help you buy your first home sooner.