First Time Buyer ISA Consultation Closes 17 August; New Scheme to Replace Lifetime ISA
The government closed its consultation on a new First Time Buyer ISA on 17 August 2026, proposing to replace the Lifetime ISA with a simpler product offering higher age flexibility and no withdrawal penalties for non-housing purposes.
The government's consultation on a new First Time Buyer ISA (FTB ISA) closed on 17 August 2026, marking the final stage before ministers decide whether to replace the Lifetime ISA (LISA) with a redesigned savings vehicle for first-time homebuyers.
Key Proposed Changes
HM Treasury is consulting on a new First Time Buyer ISA (FTB ISA), which the government has proposed as a simpler replacement for the Lifetime ISA. Under the current proposals, the government bonus would be paid when you withdraw money to buy your first home, rather than being added to your account throughout the year, and there would be no withdrawal charge, removing the 25% penalty that currently applies if LISA savings are withdrawn for another reason. The account would be open to UK residents aged 18 and over, with no upper age limit (a LISA currently closes to new savers at 40).
The consultation opened on 23 June 2026 and closes on 17 August 2026. The government has said it wants the product available as soon as practically possible after a final decision is made, but hasn't set a launch date. Details are subject to change following the consultation.
What This Means for Expats
If you are a UK resident planning to buy your first home, the FTB ISA could be more flexible than today's Lifetime ISA — particularly if you're over 40, as the new account has no age cap. The removal of the 25% withdrawal penalty means you won't be financially punished if you change your plans. However, the scheme is not yet live; savers should continue to use the Lifetime ISA under current rules. Expats with UK residency who plan to settle here long-term should monitor the government announcement once the consultation closes and they confirm a launch date.
Sources
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