On 23 June 2026, HM Treasury (HMT) published a consultation in relation to the proposed First Time Buyer Individual Savings Account (FTB ISA).

Background

HMT has confirmed that it will be withdrawing the Lifetime ISA (LISA) on the basis that it considers there is evidence to suggest that this product is not working well for many consumers, due to issues with the complexity of the product and withdrawal changes. As a result, this consultation seeks views on the implementation of this new ISA product, intended to be simpler, to be offered in place of the LISA.

Summary

Key proposals in relation to the FTB ISA include:

  • New product: The FTB ISA will help buyers of all ages and will be solely for the purpose of buying a new home up to a price cap and with a legal mortgage. In contrast to the LISA where bonuses were paid periodically, the government bonus will be paid when the individual makes a withdrawal for the purpose of buying a new home, which removes the need for a withdrawal charge and means the saver can withdraw funds, should circumstances change, without penalty.
  • Provider requirements: HMT has set out that it intends to replicate the LISA and Help to Buy ISA (HtB) frameworks where desirable – such as retaining requirements around reporting – and have emphasised that they want as many providers to offer this product as soon as reasonable practicable, as a result it has asked the industry how long it thinks it would take to build such a product in this content and the costs of doing this.
  • Eligibility and government support: While the government have confirmed certain criteria, such as that this would be available to first time buyers with a mortgage who are over 18 with bonus eligibility where the FTB ISA account has been open a year, it is seeking views on the balance between the level of price cap and government bonus that will be available, to be announced at a future fiscal event.
  • Interaction with other ISAs: HMT confirm that individuals with a LISA will have already received a government bonus and so will not be able to transfer their LISA into an FTB ISA, but that an existing LISA could be used alongside any funds and bonus in a new FTB ISA for the same purchase. In addition, it is proposed that rules will be retained that only permit individuals to sign up to one FTB ISA per year, as currently applies in relation to the LISA. HMT also confirm that, to ensure that HtB holders don’t lose out, they will be able to transfer their holdings, replicating LISA transfer rules.
  • Anti-circumvention and transfer rules: HMT also set out that it intends for the anti-circumvention rules to apply, such that the annual limit for Cash FTB ISAs will count towards the overall Cash ISA limit. Similarly, the rules preventing the Stocks and Shares ISA limit being circumvented using transfers will also apply to FTB ISAs.

Next steps

HMT has asked for responses to the consultation by 17 August 2026.