Important update - 29 October 2026
The Lifetime ISA withdrawal charge has reduced from 25% to 20% for first-time buyers purchasing a home over £450,000, provided they meet the other qualifying conditions. If this applies to you, you can request your withdrawal through the Tembo app as normal. For any questions, contact our Home Purchase team at [email protected]
What's changed?
From 29 October 2026, the LISA withdrawal charge has reduced from 25% to 20% if you're buying your first home for more than £450,000 and meet the other qualifying conditions.
This means you'll no longer lose a portion of your original contributions to the withdrawal charge, although you'll still lose the government bonus.
What does this mean for my savings?
Previously, the 25% withdrawal charge meant you lost your government bonus, plus the equivalent of 6.25% of your original contributions.
Under the new 20% charge, you'll effectively lose the government bonus without the additional deduction from your original contributions, before accounting for any interest earned.
Can you show me an example?
Let's say you've saved £4,000 into your LISA and received a £1,000 government bonus, giving you a total balance of £5,000. Here's what you'd receive if you withdrew the full balance to buy an otherwise qualifying first home over £450,000:
| Previous 25% charge | New 20% charge |
Your LISA balance | £5,000 | £5,000 |
Withdrawal charge | £1,250 | £1,000 |
Amount you receive | £3,750 | £4,000 |
Amount lost from your original contributions | £250 | £0 |
This example excludes interest to keep the calculation simple. Actual withdrawal amounts will depend on your account balance, including any interest earned.
Does the 20% charge apply to all LISA withdrawals?
No. The reduced 20% charge only applies when you're buying your first home for more than £450,000 and meet the other qualifying conditions for a first-home purchase. The standard 25% withdrawal charge still applies to other non-qualifying withdrawals.
What if I'm buying a home for £450,000 or less?
Nothing has changed for you. If you're buying your first home for £450,000 or less and meet the usual LISA requirements, you can still withdraw your savings without paying a withdrawal charge.
I'm buying a home for over £450,000. What should I do?
If your property is worth more than £450,000, you can still use your LISA towards
You can still use your Lifetime ISA savings towards your first home, even if it costs more than £450,000. If you meet the other qualifying conditions, a 20% withdrawal charge will apply, meaning you'll lose the government bonus but not your original contributions (before interest).
You can request your withdrawal through the Tembo app as normal. If you have any questions, our Home Purchase team is here to help at [email protected]