When you make a contribution to a Lifetime ISA (LISA) account, you receive a 25% bonus from the government. These bonuses are usually paid within a few months of the contribution. In this guide, we explain how long different LISA providers take to pay LISA bonuses and how the Lifetime ISA government bonus works.
What is the Lifetime ISA, and how do bonuses work?
The Lifetime ISA is a tax-efficient savings and investment account designed to help young people save for either their first home, retirement, or both. You can only open one if you’re aged between 18 and 39.
With this ISA, you can contribute up to £4,000 per year up to the age of 50. For every pound you contribute, the UK government will give you a 25% bonus.
Note that with the LISA, any contributions count towards the overall £20,000 ISA annual allowance. In other words, if you were to contribute the full £4,000 to a LISA, you’d only be able to contribute £16,000 to a Stocks and Shares ISA or Cash ISA in that tax year.
What are the restrictions on a Lifetime ISA?
With a Lifetime ISA, any money you put into it must remain in the ISA until either:
- You purchase your first property (there are a few conditions to be aware of here)
- You turn 60
So, the ISA is not as flexible as the Stocks and Shares ISA or the Cash ISA (with these accounts you can access your capital at any time).
If you do try to withdraw your money, you’ll be hit with a 25% penalty charge. This means you could potentially get back less than you put in.
In the 2023/2024 tax year, LISA withdrawal charges totalled £75.2 million. That was up from £54.3 million the previous tax year.
Do you have to do anything to get the Lifetime ISA bonus?
One major advantage of the Lifetime ISA is that to receive a bonus from the government, all you need to do is make a contribution to your account (there’s no extra paperwork or forms to fill in). After you have made a contribution, your LISA provider will make a claim from the government and pay your bonus into your account automatically.
Which providers offer Lifetime ISA accounts?
Not all providers offer Lifetime ISA accounts. Those that do include:
- Hargreaves Lansdown
- AJ Bell
- Nutmeg
- Moneybox
- Tembo
- AJ Bell Dodl
- Skipton (Cash LISA only)
How long does it take for the LISA bonus to be paid?
How long it takes for Lifetime ISA bonuses to be paid depends on your provider. Here’s a look at how long different providers take to pay the bonus.
| Provider | When LISA bonuses are paid |
| Hargreaves Lansdown | Hargreaves Lansdown advises that LISA bonuses will be paid 4 to 9 weeks after you make a contribution. |
| AJ Bell | AJ Bell makes a government bonus claim on the 6th of every month. You will receive the bonus four weeks after this. |
| Nutmeg | With Nutmeg, if you make a contribution that arrives and is cleared in your account between the 1st and 5th of the month, you’ll receive the bonus at the end of the same month. If you make a contribution that arrives and is cleared in your account on or after the 6th of the month, you’ll receive the bonus at the end of the following month. |
| Moneybox | Moneybox pays out LISA bonuses at the end of each month, based on your total contributions in the previous month. |
| Tembo | With Tembo, the LISA bonus is paid at the end of each month, but it can sometimes take between 4 to 6 weeks for the money to reach your account. |
| Dodl | With Dodl, your LISA bonus will be paid into your account 4 to 10 weeks after your contribution. |
| Skipton | With Skipton, your LISA bonus is calculated on any payments you make into your account from the 6th of the month to the 5th of the following month. Your bonus will be paid into your account within 14 days of the 20th of month two. |
Based in London, Edward is a distinguished investment writer with an extensive client portfolio comprising a diverse array of prominent financial services firms across the globe. With over 15 years of hands-on experience in private wealth management and institutional asset management, both in the UK and Australia, he possesses a profound understanding of the finance industry.
Before establishing himself as a writer, Edward earned a Commerce degree from the prestigious University of Melbourne. Complementing his academic background, he holds the esteemed Investment Management Certificate (IMC) and is a proud holder of the Chartered Financial Analyst (CFA) qualification.
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