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Best Lifetime ISA

By Antonia Medlicott

  • Published: April 24, 2024
  • Edited by: Clare West
  • Last Update: 1 week ago
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If it’s about saving for a first home as quickly as possible, then a Lifetime ISA packs a punch. Yes, there are flaws, but if you know how to navigate them, this is still the most efficient way to snowball your savings.

My independent analysis of fees, assets, features, platforms, and ready-made portfolio returns can help you identify the best Lifetime ISA available in the UK.

My quick list

*We don’t make any money from the platforms for recommending them on this list. These are my totally impartial views that I think represent the best value for money.

4.5
Moneybox

Best performing ready-made LISA historically, suitable for beginners and best interest on a Cash LISA.

Capital at risk.

5.0
AJ Bell

Best for investors looking for DIY and fully managed options.

Capital at risk.

3.0
Nutmeg

Best for access to human wealth managers.

As with all investing, your capital is at risk. Tax treatments depend on your individual circumstances and may change in the future. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest.

4.0
Hargreaves Lansdown

Best premium service from an established brand.

Capital at Risk

4.0
Dodl

Best for beginners looking for a simple, low-cost entry point

Capital at risk.

My tip: Be aware of the rules surrounding this product before you open an account as there are penalties involved should you access your money for anything other than purchasing your first home, or retirement.

*Not sure how to choose? Skip to my tips on how to choose the best Lifetime ISA.


4.5

Moneybox

Best performing ready-made LISA historically, suitable for beginners and best interest on a Cash LISA.

Capital at risk.

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Reasons to use

  • Best historical performing LISA
  • Leading interest rate on cash LISA
  • Good savings tools
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Reasons to avoid

  • Account fees are at the higher end of the spectrum
  • Mobile app only
  • Limited education

Antonia says

Our independent research of historical returns has identified Moneybox as the best-performing ready-made portfolio in a Lifetime ISA. That means that if you are a beginner who would like to grow your Lifetime ISA on the stock market but are not sure where to even start, this is a solid option. Of course, past results won’t ever guarantee future results, but they can give you an indication of how well the portfolios are being managed.

Moneybox LISA

This is also a solid option for those seeking a safer alternative, as the Cash LISA at Moneybox currently has the leading interest rate of 4.40% AER.

The app is super easy to use, and of course, Moneybox comes with loads of great savings features such as round-ups, which could just help you purchase your new home that little bit quicker. There is also mortgage advice, a free deposit calculator, automatic deposits, and a Home-buying ‘Gifts’ feature that allows friends and family to contribute towards your home deposit.

Use this if

  • You are looking for the highest returns on a ready-made portfolio in a LISA.
  • You would like the option to build your own portfolio.
  • You don’t have a large starting pot and could utilise the money-saving tools to grow your portfolio.

Fees

  • £1 subscription fee after the first 3 months
  • 0.45% platform fee
  • Annual fund provider costs 0.09% – 0.88%
  • 0.45% FX fee for US stocks

Investments

  • Ready-made portfolios
  • US Stocks
  • Fractional shares
  • Tracker funds
  • ETFs

Scores

Fees:

3.5

Trading platform:

4.0

Account opening:

5.0

Research:

3.5

Education:

3.5

Customer service:

3.5

Read full review

Read full review >
5.0

AJ Bell

Best for investors looking for DIY and fully managed options.

Capital at risk.

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Reasons to use

  • Shares custody capped at £3.50 per month
  • Good range of assets
  • Regular investing
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Reasons to avoid

  • Large portfolios will incur large percentage fee costs to hold funds
  • £5 trading fee

Antonia says:

AJ Bell offers a really low-cost option for a Lifetime ISA, and the recent reduction to their trading fees has made this even better value.

The average historical returns on their ready-made portfolios are just above the industry average, and there has been particular success for investors who were willing to assume a bit more risk with their adventurous portfolios.

AJ Bell LISA

Investors with a bit more knowledge will enjoy the range of shares, funds, investment trusts and ETFs to choose from.

You won’t find a Cash LISA at AJ Bell. If that’s your preference then I would look to Moneybox.

Use this if

  • You are a buy-and-hold investor looking to hold shares, ETFs, and investment trusts.
  • You have a large portfolio.

Fees

  • Shares custody charge: 0.25% (maximum £3.50 per month)
  • Funds custody charge: 0.25%
  • Shares dealing: £5
  • Ten or more share deals in the previous month: £3.50
  • Fund dealing: £1.50

Investments

  • Shares
  • Funds
  • Exchange-traded funds
  • Investment trusts

Scores

Fees:

4.5

Trading platform:

4.5

Account opening:

5.0

Research:

4.5

Education:

5.0

Customer service:

5.0

For a detailed analysis of AJ Bell, check out our review for 2024

Read full review >
3.0

Nutmeg

Best for access to human wealth managers.

As with all investing, your capital is at risk. Tax treatments depend on your individual circumstances and may change in the future. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest.

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Reasons to use

  • Good starting option
  • Access to wealth managers is free
  • Well-established and simple to use
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Reasons to avoid

  • High entry point of £500
  • Limited investment options
  • Funds take 3 business days to clear in your account
  • Below-average historical performance on ready-made portfolios with no other options

Antonia Says

Nutmeg are a great option for home savers who would like the maximum amount of assistance with investment decisions. As a robo-advisor, they will take you through a series of questions that are designed to match you with a portfolio to suit your circumstances and risk tolerance.

Nutmeg LISA

It would be remiss not to mention that their managed portfolios have seen fairly poor returns so, here at Investing Insiders we had a look at how these returns compared to the less expensive fixed allocation portfolios. We were surprised to learn that with the exception of the lowest risk portfolio, fixed allocation has actually outperformed fully managed for the past five years net of fees. This could help some investors make a more informed decision.

Use this if

  • You are just starting out with limited to no investment experience and require the maximum amount of assistance available.

Fees

  • 0.7% – 1.15% for portfolios ranging from fully managed to fixed allocation.

Investments

  • Ready-made portfolios
  • Socially responsible investing
  • Thematic Investing

Scores

Fees:

4.0

Trading platform:

4.5

Account opening:

4.5

Research:

4.0

Education:

3.0

Customer service:

5.0

Click here to read a full review

Read full review >
4.0

Hargreaves Lansdown

Best premium service from an established brand.

Capital at Risk

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Reasons to use

  • Solid reputation
  • Wide range of investments
  • Premium service
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Reasons to avoid

  • High fees for dealing shares
  • Dated
  • Lack lustre historical returns on their ready-made portfolio

Antonia Says

Hargreaves Lansdown has a long-standing reputation for offering a best-in-class service, albeit at a significant cost. This is the largest fund supermarket in the UK, with over 3,500 funds to choose from, so if you are the sort of investor who finds this breath of choice intimidating, you may be best served elsewhere.

Hargreaves Lansdown LISA

Education is excellent here and there is the option to access financial advice
on the phone or in person; however, this does come at a cost that is akin to the industry standard.

Hargreaves Lansdown has recently reduced their account fees for the Lifetime ISA, and at 0.25%, this is now a fairly cost-effective solution unless you are looking to deal shares on a regular basis, in which case anything short of nine deals per month will result in charges of £11.95 per deal. This is about as high a dealing fee as you will find anywhere. However, you can buy and sell funds free of charge, so that’s still a viable option.

Use this if

  • You are planning to invest in funds and would like to use a platform that provides comprehensive guidance at every step of the investment journey.

Fees

Management Fees:

  • 0.25% for funds
  • 0.25% capped at £45 for shares

Share Dealing fees:

  • 0-9 deals in the previous month – £11.95 per deal
  • 10-19 deals – £8.95 per deal
  • 20+ deals – £5.95 per deal

Investments

  • 3,500 funds
  • Global shares
  • Bonds
  • ETFs
  • Unit trusts
  • Investment trusts

Scores

Fees:

2.5

Trading platform:

4.0

Account opening:

3.5

Research:

3.5

Education:

3.5

Customer service:

4.0

To read our detailed no stone left unturned review of Hargreaves Lansdown

Read full review >
4.0

Dodl

Best for beginners looking for a simple, low-cost entry point

Capital at risk.

check

Reasons to use

  • Very low cost
  • Excellent customer service
  • Extremely simple and easy
cross

Reasons to avoid

  • Limited choice of stocks and funds

Antonia says:

This is one of the best value Lifetime ISAs available and makes for a really easy, seamless experience for those with no, or limited investment experience.

Dodl LISA

At Dodl there is also the added comfort of knowing that they are part of a big legacy brand, making this a reliable option. They also provide a great level of customer service so newbies are fully supported along the way.

Investors can pick from ready-made portfolios or some assets including stocks, funds, and ETFs. However, this is a fairly limited service that won’t suit investors with experience looking for a wide range of assets to pick from.

Use this if
You are looking for a really pared-back, cheap and easy service that is quick to get up and running.

Fees

  • Account charge of 0.15% per year
  • FX fees: 0.75% – 0.25%
  • Min deposit: £100 for lump sums, £25 for monthly deposits

Investments

  • Ready-made portfolios
  • UK and US stocks
  • Funds
  • ETFs

Scores

Fees:

5.0

Trading platform:

4.5

Account opening:

5.0

Research:

1.5

Education:

5.0

Customer service:

3.5

For a detailed analysis of Dodl, check out our review for 2024

Read full review >

What is a Lifetime ISA?


A Lifetime ISA is an account designed to help people save for their first home or for retirement. Every deposit you make into a Lifetime ISA will attract a healthy government bonus of 25%, making this the most efficient way to save. However, you must be between the ages of 18 and 39 to open one of these accounts and there are a number of additional rules that you should familiarise yourself with before you open a Lifetime ISA. For more information please refer to my article Everything you need to know about Lifetime ISAs.

Cost comparison table


The cost to hold a stocks and shares Lifetime ISA is fairly minimal and even Hargreaves Lansdown who are notoriously expensive in other areas fair well when it comes to the pricing of this account.

Of course, it is important to remember that cost is not the only factor to take into consideration. How your investments perform is equally important when it comes to making your money grow. For new investors seeking a ready-made portfolio that is managed by experts, this becomes particularly crucial.

Ready-made portfolio performance
The following analysis has been conducted in-house and is exclusive to Investing Insiders.

In order to help you select the very best vehicle for your Lifetime ISA, we have analysed the portfolio performance across the platforms offering this account. Please note that as part of AJ Bell, Dodl offers the same portfolios, and therefore they have been omitted from this analysis.

As you can see, Moneybox has retained the lead when it comes to performance across all time scales. Of course, this does not mean that Moneybox will continue to lead the way when it comes to returns, as past performance can never guarantee future returns, however, it can indicate consistency in the management of the portfolio.

How I chose the Lifetime ISAs on this list


It’s actually surprising how few providers offer stocks and shares Lifetime ISAs. Needless to say, this list represents just about all the Lifetime ISAs available to you. However, where I have attempted to bring value is by analysing and comparing the costs, features, and performance of the Lifetime ISAs on offer.

Right at the top of this list is Moneybox. Almost certainly, if I was still within the age range to open a Lifetime ISA, Moneybox would be my first choice. The performance of their ready-made portfolios is just too obvious to ignore and in my youth, I knew too little of how to make good investment decisions to warrant picking my own assets.

That being said, if you are knowledgeable about the stock market and think you could beat those returns, (a simple tracker fund could suffice), then AJ Bell has an excellent choice of assets which still come within a reasonable price range.

How to choose the best Lifetime ISA for you


This quite simply comes down to experience. How much knowledge do you have of the stock market? Would you be able to resist making emotional decisions should your investments fall?

Beginners
If you have little to no experience and are looking for an easy, time-efficient way to invest your money in a Lifetime ISA then your choices would come down to:

  • Moneybox
  • Dodl
  • Nutmeg

Of these three choices, Nutmeg is the most expensive option with the poorest performing portfolios so that would be easy to discount as an option. Net of fees, Moneybox would have seen the best return on your investment for the last 10 years and would therefore be an obvious choice.

Intermediate/experienced
For those with more investment experience, your choices would be between:

  • Hargreaves Lansdown
  • AJ Bell

Of these two options, AJ Bell is the most cost-effective solution in almost every circumstance and would therefore be my first choice.

Planning to buy a property within the next 5 years?


Then your decision is easy. Investing should always be considered a long-term endeavour with a minimum period of 5 years in order to ride out any volatility in the market. If you are holding your Lifetime ISA for less time, then you should opt for a Cash Lifetime ISA at Moneybox, where you will find the leading interest rate available.

FAQs

It is my finding that Moneybox is offering the best Lifetime ISA for beginners and AJ Bell are a compelling alternative for experienced investors. This is based on price, portfolio performance, range of assets and features.

Yes, Moneybox has all the correct levels of authorisation and regulation and was deemed completely safe during our review. They also offer protection from the Financial Services Compensation Scheme up to £85,000 should the platform fail for any reason.

It is my opinion that this is an under-utilised product for those saving for their first home. The government bonus would have a significant impact on growing your savings. However, you should be aware of the price cap on the value of the property you buy, especially for those living in London. I would also be more reluctant to recommend it as a vehicle for saving for retirement. For more information on this please refer to my guide on Lifetime ISAs.

Yes, you can swap providers at any time and as often as you wish. If you currently have a Lifetime ISA and have doubts about the performance or costs associated with your current provider then you should definitely consider transferring your Lifetime ISA to one of the providers above.

No, the maximum you can put into a Lifetime ISA in any one financial year is £4,000. However, if you wish to save more than this towards a property, you can put a further £16,000 into any other ISA product including a Stocks and Shares ISA or a Cash ISA. While this won’t attract the government bonus, these products will still provide you with the opportunity to grow your wealth either via interest or by investing in the stock market. If you do decide to do this, Moneybox have an excellent interest rate on their cash ISA which I utilise myself. You could also access the same ready-made portfolios, and their historically favourable returns, with the stocks and shares ISA.

Note from the insiders:


Due to the rules laid out by HMRC, which stipulate that individuals only contribute to one Lifetime ISA in any one tax year, there are occasions whereby I have opened a General Investment Account in order to test the platforms and the services they offer. This has, in no way, hindered my research of the platforms in order to provide you with this list.