Government Launches Consultation on New First Time Buyer ISA
Quick answer
The UK government launched a consultation on 23 June 2026 on a new First Time Buyer ISA designed to replace the Lifetime ISA. Here is what we know so far and what it means for your savings plans.
On 23 June 2026, the UK government launched a formal consultation on the First Time Buyer ISA - a proposed new, simpler savings product designed to help people buy their first home. Once it becomes available, the new product will be offered in place of the Lifetime ISA. No launch date has been set, and no specific rates or limits have been confirmed yet.
What the consultation actually covers
The government has already committed to creating the First Time Buyer ISA. The consultation is not about whether the product will exist - it is about how it should be designed and implemented. That means contribution limits, any government bonus arrangements, property price caps and eligibility criteria are all still to be determined.
If you want to read the detail or submit your own views, you can do so at the GOV.UK First Time Buyer ISA consultation page - the official source for all confirmed information on the proposal.
What it means for you right now
If you are saving for a first home, nothing changes immediately. The Lifetime ISA remains open and unaffected while the consultation runs. The replacement is a future event, not an imminent one.
The government has described the new product as simpler than the Lifetime ISA, which suggests it may address some of the friction that has long drawn criticism - but it would be speculation to assume what form that simplification takes before the consultation concludes.
Putting it in context: the tax-free saving you can do today
In 2026/27, every UK adult can save up to £20,000 per year across all their ISAs, and any interest or growth inside that wrapper is free of income tax and capital gains tax. If the First Time Buyer ISA sits within this overall annual limit - as the Lifetime ISA currently does - a couple saving jointly could shelter a significant sum tax-free each year while working towards a deposit.
Because no figures specific to the new product have been published, the best you can do now is plan around what already exists. The ISA calculator lets you project how your current savings could grow over time, while the house deposit calculator helps you work out the target you are actually saving towards.
Who is affected
- Current Lifetime ISA holders - not immediately affected. Keep an eye out for government guidance on whether existing balances will be transferable to the new product.
- First-time buyers actively saving - the eventual design of this product matters to you. Monitor the consultation timeline and any announcements that follow.
- Anyone thinking about opening a Lifetime ISA now - the product is earmarked for eventual replacement, though no closure date has been set. It remains a valid option for eligible savers in the meantime, but that context is worth bearing in mind.
- Financial industry firms - the consultation explicitly invites views from providers on implementation, so this is also relevant to anyone offering savings products.
What to do now
With no product yet available and no figures confirmed, practical action is limited. Here is what is sensible:
- If you hold a Lifetime ISA that fits your timeline, continue using it until further notice.
- Make the most of your existing £20,000 annual ISA allowance through a cash ISA or stocks and shares ISA while you wait for the new product to take shape.
- Work out your likely stamp duty bill on a future purchase using our first-time buyer stamp duty calculator - knowing what you owe on completion helps you plan your total deposit target accurately.
- If you already hold a Lifetime ISA, model your current position with the Lifetime ISA calculator before making any decisions about contributions.
This article is for general information only and does not constitute personal financial or tax advice. The First Time Buyer ISA has not yet been legislated; all details remain subject to the outcome of the government's consultation.
