First Time Buyer ISAs - 25% bonus when you buy your first home

It’s planned to replace the Lifetime ISA as the flagship first-time buyer savings product. In simple terms, this looks a bit like a Help to Buy ISA 2.0: you save for a first home, the state adds a bonus when you're ready to buy a home, and the money can be used at exchange.

But unlike the old Help to Buy ISA, it allows lump sums; unlike the Lifetime ISA, there’s no withdrawal penalty.

We got more detail on this scheme in the Budget in October 2026. We've updated what's below with the new information...

1. You need to be a genuine first-time buyer aged 18 or over to open a First Time Buyer ISA – but there's no upper age limit

   If the FTB ISA follows the Lifetime ISA's definition of a first-time buyer, that'll mean you must have NEVER owned a property anywhere in the world. Not in the UK, not overseas, not a share of one, and not one you inherited then sold straightaway.

   The key difference from the Lifetime ISA is there’s no upper age limit. With a LISA, you have to be under 40 to open it and must stop paying in once you turn 50. With the First Time Buyer ISA, there’s no upper age cap to opening it or saving into it.

2. You can save up to £4,000 a year - and will get a bonus of 25% when you buy (max £20,000 bonus)

   Like the Help to Buy ISA and Lifetime ISA before it, the First Time Buyer ISA will come with a Government bonus.

   And as with those two, the bonus will be set at 25%. This time the 25% applies to the full balance in your FTB ISA at the point you come to buy a property, subject to a maximum £20,000 bonus.

   So, if we ignore interest or growth on investment, that'd mean you could save for 20 years to max it out. But it's possible that if you save and get high interest, or invest and get high growth, that you'd hit that limit sooner.

3. You must be buying a residential UK property for £450,000 or less to live in

   To get the bonus, you’ll need to buy a qualifying UK residential property that you’re going to live in.

   You’ll also need to be buying with a residential mortgage. So you can’t be a cash buyer, and it can’t be a buy-to-let mortgage.

   One of the major problems with the Lifetime ISA is its £450,000 cap, which has left many unable to use it in more expensive parts of the country.

   Yet under current plans, the First Time Buyer ISA is set to have the same £450,000 limit. The Government's said it thinks that level strikes a balance between helping "typical" first-time buyers, and protecting taxpayer interests. We'll continue to lobby on this point, as things could change between now and April 2029.

4. Each person has their own FTB ISA, so couples can have one each

   There’s no such thing as a joint First Time Buyer ISA. Each person has their own.

   So if two first-time buyers are buying together, both can have one and both can get the bonus – effectively doubling the help.

   If you’re a first-time buyer buying with someone who has owned before, you can still use your First Time Buyer ISA towards the purchase. They just can’t have one.

   

   But the property price cap won’t double just because two people are using First Time Buyer ISAs. The cap applies to the property, not the person/people.

5. The bonus will be paid at exchange when you buy a qualifying property

   The Lifetime ISA pays the bonus into the account monthly, which means if you take money out for anything other than a qualifying home or age 60+ (in other words, using the LISA cash for something other than what it was designed for), there's a 25% withdrawal charge to claw it back (though those buying for more than £450,000 will only get a 20% withdrawal charge).

   The Help to Buy ISA had the opposite problem: the bonus was paid at completion, when buyers usually needed the money earlier, at exchange.

   The First Time Buyer ISA aims to fix that. The bonus will be paid at exchange, when you’re properly committed to the purchase and when the cash is useful.

   How you'll claim the bonus

   When you come to buy a property, your conveyancer will need to make the withdrawal of your balance from the FTB ISA, and also claim the bonus. That’s admin, so expect a fee, likely around £50+VAT. They’ll submit the declaration to your ISA provider, the provider claims the bonus from HMRC, then the full amount is transferred to the conveyancer ready for exchange.

   If the purchase falls through after the bonus has been claimed, the conveyancer has 90 days to return the money to the original account. The provider returns the bonus to HMRC, and you should still be able to claim the bonus again on a later qualifying purchase.

6. You need to have a First Time Buyer ISA open for a year or more to be able to use it for a home

   

   If it’s been open for less than a year, you can still withdraw your own money and use it towards a deposit, but you won’t get the Government top-up.

   This mirrors the Lifetime ISA rule and is there to stop people who are already about to buy just flipping cash in and immediately grabbing taxpayer-funded bonus money.

   Likely tip once accounts launch: open one early with £1 to start the clock. But we’ll need the final rules (and have some providers launch accounts!) before saying that firmly.

7. You'll be able to choose a cash FTB ISA OR a stocks and shares FTB ISA

   As with the Lifetime ISA, you’ll be able to choose whether to save in cash or invest through a stocks and shares version, assuming providers offer both.

   Whichever you choose, what you pay in counts towards your annual £20,000 ISA allowance.

   Note: The Government was planning to cut the cash ISA allowance for under-65s to £12,000 from April 2027, however it scrapped these plans in the 2026 Autumn Budget, meaning the Cash ISA allowance will remain at £20,000 for all.

8. You'll be able to transfer between FTB ISA providers to get a better deal

   You'll be able to transfer between providers if you spot a better deal, so you'd be able to open a cash FTB ISA with one provider, then transfer it later to another provider, for example if the second provider has a better rate. The same's true of stocks & shares FTB ISAs.

   That depends on providers accepting transfers in. It won’t be compulsory, but in practice many are likely to do so as they’ll want savers’ money.

   Yet, there's an important point here. You can only hold ONE First Time Buyer ISA at a time. So if you want to transfer between providers, or between cash and investment FTB ISAs, you'll need to transfer the full balance and close the old account.

9. If you have a Help to Buy ISA, you'll be able to transfer it to a FTB ISA – but you won't be able to transfer a LISA

   Help to Buy ISA money will be transferable into a First Time Buyer ISA. That’s because a Help to Buy ISA only holds your savings and interest; the bonus isn’t added until you buy. So it’s relatively clean to transfer across.

   Yet if you have a Help to Buy ISA and want to transfer it, there'll be a relatively limited window to do so (at least without it counting towards your annual FTB ISA allowance). If you want to take advantage of that, you'll need to transfer your full H2B ISA balance into the First Time Buyer ISA between 6 April 2029 (the date the FTB ISA launches), and 1 December 2030, when the Help to Buy ISA scheme is due to close.

   A Lifetime ISA is different. The Government bonus has already been paid into it, so you won’t be able to transfer a LISA into a First Time Buyer ISA and then claim another bonus on the same money when you buy a home.

   Yet, if you have a LISA, you will be able to use both it AND a FTB ISA towards a home...

   ... let's say you've saved £20,000 (incl bonuses) in your LISA, and then you choose the FTB ISA and save a further £10,000 in that before you buy a property. You'll be able to use the £30,000 - plus the £2,500 FTB ISA bonus amount - towards the property purchase... assuming the home you're buying qualifies.

   The catch: once the First Time Buyer ISA launches, you’ll need to choose between paying into a LISA or a First Time Buyer ISA in the same tax year. You won’t be able to pay into both.

10. You'll be able to withdraw cash from your FTB ISA without penalty

    

    An improvement from the Lifetime ISA in that you won't need to lose 6.25% of your own money if life happens and you need to withdraw cash from the account (find out more about the Lifetime ISA penalty).

    With the FTB ISA, you'll be able to access all your own money (plus any interest or investment growth) without paying an explicit penalty.

    Though, as the bonus is paid on the final balance in your FTB ISA when you come to exchange, if you've not managed to replace the money you took out, you'll get less bonus... so you are still discouraged from taking money out of your FTB ISA, even if you're not actually paying a penalty for it.

11. The FTB ISA will launch in April 2029

    We were hoping it'd be sooner than this, but final guidance is not yet available (as of October 2026) for banks and other providers to design their products around. Plus the banks have said they need six to 18 months to launch. So, the date for launch has been set for 6 April 2029.

    In the meantime, the Lifetime ISA is your best bet for saving for a home - but remember, you won't be able to transfer the contents of your LISA in to your FTB ISA (though you will be able to use both towards your property purchase).