Experts are advising first-time buyers to open a lifetime Isa now rather than wait for the government's planned first-time buyer Isa, which is expected to replace it but may offer less generous terms. The current lifetime Isa provides a 25% government bonus on savings up to £4,000 a year, but the new account is unlikely to match this benefit fully, meaning delaying could cost savers money in lost bonuses and investment growth.

The lifetime Isa lets those aged 18 to 39 save up to £4,000 annually until age 50, with a monthly 25% government top-up capped at £1,000 a year, though funds can only go towards a property costing £450,000 or less without incurring a 25% penalty. The replacement, not expected before 2028, will reportedly have no upper age limit or withdrawal charges, but will pay its bonus as a lump sum at purchase rather than monthly, based only on contributions rather than final fund value — a change one expert calculates could cost a saver over £3,600 in lost growth over 10 years. Key details, including the bonus rate, contribution limit and property price cap for the new Isa, remain unconfirmed.