Help to Buy vs Lifetime ISA: Which One Is Better in 2025?

For first-time buyers in the UK, navigating the various government schemes can be challenging. Two of the most talked-about options in recent years have been Help to Buy and the Lifetime ISA (LISA). Although Help to Buy has changed significantly since its initial launch, and LISAs have remained a popular choice, it’s important to understand their differences in 2025.

The right decision depends on your home-buying goals, savings capacity, and eligibility. Let’s explore how each scheme works today and which might be better suited to your situation.

Help to Buy in 2025

Help to Buy was originally introduced to make property ownership more accessible by offering equity loans to buyers of new-build homes. Under the scheme, the government would lend up to 20% of the property’s value (40% in London), with buyers contributing a 5% deposit and securing a mortgage for the rest.

However, by 2025, the Help to Buy Equity Loan scheme has officially closed to new applicants in England, although some regional variations and legacy cases remain. In Scotland and Wales, similar shared equity schemes may still be available, though terms differ.

Lifetime ISA in 2025

The Lifetime ISA remains open and popular for those saving to buy their first home. Available to individuals aged 18 to 39, it allows you to save up to £4,000 annually, with the government adding a 25% bonus. Funds can be used to buy a property worth up to £450,000 or withdrawn after age 60 for retirement.

Early withdrawals for other purposes incur a penalty, making it important to commit to the intended use.

Key Differences Between the Two

Two main points distinguish Help to Buy and the Lifetime ISA:

  • Availability: Help to Buy equity loans are largely closed to new applicants in England, while LISAs remain accessible to new savers.
  • Funding approach: Help to Buy provided a loan towards your property purchase, whereas a LISA is a savings vehicle with a government bonus.

These differences mean that in 2025, the LISA is generally the more widely available option for most first-time buyers.

Pros and Cons in Today’s Market

In the current property market, both schemes (where still applicable) have distinct advantages and limitations:

  • Help to Buy: Allowed buyers to access homes sooner with a smaller deposit but restricted them to new-build properties and carried potential repayment challenges.
  • Lifetime ISA: Encourages disciplined saving with a government bonus but requires time to build a substantial deposit and imposes penalties for non-qualified withdrawals.

Understanding these trade-offs is essential for making an informed choice.

Which Should You Choose in 2025?

With Help to Buy no longer widely available in England, the Lifetime ISA is the primary government-backed scheme for first-time buyers. If you are eligible, opening a LISA early maximises your bonus potential and gives you greater flexibility over when you purchase.

However, if you live in Scotland or Wales and have access to a regional Help to Buy or similar shared equity programme, comparing the terms carefully can help you decide whether it suits your needs better than a LISA.

In most cases, for 2025, the Lifetime ISA offers more flexibility, wider availability, and an ongoing incentive for disciplined saving — making it the go-to option for many aspiring homeowners.

Published in: 07/08/2025

Written By

jones Taylor is the Chief Strategist at AJ Bell. He has 16 years of experience analysing global markets, with a focus on sectors like consumer goods and mining. His career includes a role in London covering the European Consumer and Beverage sector. He holds a Business Administration degree from the University of Westminster, is CFA accredited, and was named a top equity analyst by Institutional Investor magazine for three consecutive years.

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