# Martin Lewis Urges First-Time Buyers to Open Lifetime ISAs Before 2029 New government savings scheme will replace current Lifetime ISAs starting in April 2029. - **Source:** [Metro UK](https://metro.co.uk) - **Published:** 2026-11-04 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/79dcaa47-09e9-457b-9926-a28c01a81633 ## Upcoming Savings Scheme Transition The UK government plans to replace the current Lifetime ISA (LISA) scheme with a new First-Time Buyer ISA (FTB ISA) on April 6, 2029. While existing LISA holders can continue using their accounts, the scheme will close to new applicants once the new product launches, prompting urgent advice from financial expert Martin Lewis. ## Strategic Account Opening Advice Martin Lewis recommends that potential first-time buyers open a LISA immediately, even with a nominal deposit of just one pound. This strategy secures access to the facility before the 2029 deadline. Maintaining an open account provides long-term flexibility, allowing users to utilize the vehicle for retirement savings if their home-buying plans change later. ## Comparing LISA and FTB ISA The current LISA is available to individuals aged 18 to 39, while the upcoming FTB ISA will remove age restrictions for applicants over 18. Although both schemes feature a 450,000 pound property price cap, they differ in bonus structures. The FTB ISA will offer a maximum bonus of 20,000 pounds, calculated on total account balance. ## Bonus Calculation and Limitations The new FTB ISA bonus will be calculated based on the total amount inside the account at the time of purchase, including accrued interest. This represents a significant shift from original proposals. However, savers cannot transfer existing LISA funds into the new FTB ISA, and contributions to both accounts are prohibited within the same year. ## Penalty Reduction for Buyers Chancellor John Healey recently reduced the penalty for purchasing homes exceeding the 450,000 pound threshold from 25 percent down to 20 percent. This adjustment ensures that buyers who exceed the price cap can recover their original contributions plus interest, effectively removing the previous 6.25 percent fine that penalized those priced out of the market. ## Risks of Early Withdrawal Savers must remain cautious regarding early withdrawals before the age of 60, which currently incur a 25 percent penalty charge. This fee can potentially reduce the total capital below the amount originally deposited. Consequently, individuals unsure about their home-buying timeline or property budget should carefully evaluate these risks before committing significant funds to ISAs. ## Help to Buy ISA Integration While LISA funds cannot be transferred into the new FTB ISA, the government will allow transfers from the older Help to Buy ISA scheme. This provides a pathway for existing savers in older products to transition into the new system. First-time buyers should monitor these specific transfer rules as the 2029 launch date approaches. ## Long-term Financial Planning Implications The transition highlights the evolving nature of government-backed savings products in the UK housing market. By securing a LISA now, individuals hedge against future policy changes while maintaining a versatile financial tool. Whether used for a property deposit or long-term retirement planning, early account activation remains a low-cost, high-utility move for eligible young savers. ## Sources covering this story - https://metro.co.uk/2026/11/04/martin-lewis-issues-ticking-clock-savings-warning-first-time-buyers-29765042/ — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._