Can I have a Cash ISA and Lifetime ISA?

Can I open a Lifetime ISA if I already have other ISAs?

Yes, you can open a Lifetime ISA even if you already have other ISA types. You might already have a Cash ISA or a Stocks and Shares ISA, for example. By opening a Lifetime ISA as well, you can place up to £4,000 a year in your LISA, get a 25% boost from the government (up to £1,000), and then place any additional savings or investments in other types of ISA. 

Remember, withdrawals from a Lifetime ISA for any purpose other than buying a first home (up to a value of £450,000) or for retirement will incur a 25% government penalty, meaning you may get back less than you paid in.

If you’d like to compare the two, take a look at our Cash ISA vs Lifetime ISA guide. 

Can you pay into a Lifetime ISA and a Cash ISA in the same year?

Yes, you can pay into a Lifetime ISA and a Cash ISA in the same tax year. Under existing ISA rules, you can pay into two or more ISAs in the same tax year providing they are different types. So you could pay into a LISA, Cash ISA and Stocks and Shares ISA in the same tax year if you wish, but you can’t pay into two LISAs, two Cash ISAs, or two Stocks and Shares ISAs in the same tax year.

Confusingly, although you can pay into a Cash ISA and a Stocks and Shares ISA in the same tax year, you can’t pay into a Cash Lifetime ISA and a stocks and shares Lifetime ISA in the same tax year. In the eyes of the government, they’re both considered the same type of ISA. 

You just have to make sure that the money you deposit across all of your ISAs (including your Lifetime ISA) does not exceed £20,000 - this is the annual ISA limit.

Can you pay into multiple ISAs in the same tax year?

Cash LISA + Cash ISA ✅

Cash LISA + Cash ISA + Stocks and Shares ISA ✅

Cash LISA + Stocks and Shares LISA ❌

To learn more, take a look at our guide to the Lifetime ISA and the tax year. 

Does a LISA count towards the ISA limit?

Yes, the money you put in a LISA counts towards the £20,000 a year ISA limit. Since the ISA limit is capped at £4,000 a year, this leaves you with up to £16,000 a year to spread across other types of ISA. 

If you’re saving for a house deposit and you hope to buy a home in the next 3-5 years, it can be a good idea to keep any additional savings in a cash ISA. You’ll earn interest on your savings and your money will be readily available whenever you need it. 

If you place your savings in stocks and shares ISA, your money will be invested in the stock market and the value of your investments can go up and down. There’s no guarantee you’ll get back what you put in, so using this type of ISA for your house deposit can be risky, particularly if you’ll need access to your money in the next few years.

Learn more: Is a Lifetime ISA worth it?

Can I transfer money from Cash ISA to Lifetime ISA?

Yes, you can transfer money from a Cash ISA to a Lifetime ISA. The funds you transfer into your LISA will qualify for the government bonus, which you’ll usually receive within 4-6 weeks of completing the transfer. However, you can only transfer enough funds into your LISA from a different type of ISA to take you up your £4,000 limit. So if you’ve already put in £1,000 into your LISA this tax year, you can only transfer £3,000 from your ISA into your LISA. If you’ve not put any money into your LISA this tax year yet, you can transfer up to £4,000 from another ISA account. Any additional savings will have to stay in your cash ISA until the following tax year.