The number of people using the Hargreaves Lansdown (HL) Lifetime ISA (LISA) to buy a home has increased every year since the product’s launch, with new figures showing four and a half times as many purchasers in 2025 compared with 2018.
Almost one in four people who used the HL LISA to purchase a property still have money invested in the account that they can use for retirement. Around 7% of those buyers have made further contributions following their purchase, using the product for its dual purpose.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “One in four people who used their HL Lifetime ISA to buy a property still have money invested in their account. Some 7% have topped it up. It goes to show that despite the fact it’s still relatively early days for the Lifetime ISA, there are strong signs that people are taking advantage of the dual purpose of the account.
“This is one of the questions the Treasury Select Committee is considering when it weighs up whether the LISA is fit for purpose, and whether having a single product for two separate goals is working. HMRC is putting together research which will show whether this is typical of the broader market.
“It will still be difficult to draw concrete conclusions, because someone who started saving in 2017 at the age of 25 would still only be 33, and while on average they will have used their LISA to buy a property, they might not yet be focusing on saving for retirement. At this age, many people will have been automatically enrolled into workplace pensions, and not given it any additional thought. It’s only as they get older and consider all their options that some will understand the potential role of a LISA.”
Coles added: “Topping a LISA up for retirement isn’t going to be the right approach for everyone. Higher-rate taxpayers will get more tax relief in a pension or a SIPP, and anyone in a workplace pension scheme is better off making contributions to that first, in order to unlock employer contributions.
“However, there are some for whom the LISA is a brilliant retirement option. Basic-rate taxpayers who have maxed out employer contributions, and those who work for themselves, have no employer contributions to lose. The LISA top up gives them the same benefits as basic rate tax relief on a pension – with the added bonus that all the income from a Lifetime ISA is always tax free.
“It means the measure of success isn’t that everyone who uses a LISA to buy a home immediately goes on to use it in retirement – but that enough of the right people do at the right time for their finances. These figures show that a decent chunk of buyers have already decided it’s the right approach for them, and are using the Lifetime ISA to support two of the most expensive milestones in their lives. Over time we can only expect those numbers to grow.”
