The Lifetime ISA delivered almost £140m in government bonuses last year, as industry figures caution against replacing the scheme without clear improvements.
More than 50,000 first-time buyers used a Lifetime ISA (LISA) from Moneybox to purchase their first home in 2025, according to new data, as debate intensifies over the future of the scheme.
The figures show that £139.6m in government bonuses were paid to Moneybox customers over the year, with buyers receiving an average of £2,594 towards their deposits. Overall, house purchases using a LISA rose by 12% year-on-year, equating to a first home being bought every 10 minutes.
The product, now used by more than 1.5 million people, continues to play a central role in helping first-time buyers overcome affordability pressures, particularly around deposit requirements.
The data comes as the government prepares to consult on a potential replacement for the LISA, which would mark the third iteration of a dedicated first-time buyer savings product in just over a decade.
CONCERNS OVER FUTURE SUPPORT
Industry participants have raised concerns that any replacement risks adding complexity rather than addressing the structural challenges facing first-time buyers.
A survey of Moneybox LISA savers found that 83% view rising house prices relative to income as the biggest barrier to homeownership, while 50% cited the challenge of saving a sufficient deposit within a reasonable timeframe.
However, the existing scheme appears to be supporting saving behaviour. Almost six in 10 respondents said the LISA had enabled them to build a deposit faster, while 49% pointed to the monthly government bonus as a key motivator for consistent saving.
There are also concerns about how existing savers would be treated under any new system. More than a quarter (27%) said they were worried they may not be able to transfer their savings into a replacement product, while one in 10 feared their needs could be overlooked.
Brian Byrnes, director of personal finance at Moneybox, said: “Our data shows that the Lifetime ISA is doing what it was designed to do — helping first-time buyers onto the property ladder while building strong saving habits along the way.
“Replacing it with yet another first-time buyer ISA risks adding complexity rather than solving the real issues. Without clear, meaningful improvements, there’s a danger this becomes more ‘policy theatre’ than genuine reform.
“The LISA’s monthly government bonus is a big part of what makes it work. It keeps people motivated, builds momentum, and helps turn long-term goals into real progress.
“Any changes should build on these strengths — not lose them — and must protect the confidence of the 1.5 million people already using a LISA to save for their future.”
REGIONAL ACTIVITY AND GROWTH
Moneybox’s data also highlights regional variations in LISA-supported purchases. Bristol retained its position as the most active location for the sixth consecutive year, with transactions increasing by 8%.
In the city, buyers contributed an average of £16,285 towards deposits, supported by a £2,953 government bonus, for homes with an average value of £322,727.
Belfast and Sheffield also recorded notable growth, with LISA-enabled purchases rising by 15% and 18% respectively.
Nottingham emerged as the fastest-growing location, entering the top 10 with a 30% increase in activity. Lower average property values of £234,212 enabled buyers to purchase with deposits of £12,762, supplemented by an average bonus of £2,379.
The findings reinforce the role of targeted savings support in improving access to homeownership, particularly as affordability constraints continue to shape the market.
