Many first-time buyers are still missing out on up to £1,000 a year in free government bonuses by not saving into a Lifetime ISA (LISA).
As house prices climb and sustainable investing grows in popularity, it’s more important than ever to make your money work harder – while staying true to your values.
A Lifetime ISA is a tax-free savings account offering a 25 per cent government bonus on up to £4,000 saved per year. That’s up to £1,000 a year, or potentially £10,000 over ten years – free money to help you buy your first home (priced under £450,000) or fund your retirement from age 60.
However, many are missing out. In the 2022-23 tax year, just 56,100 people used a LISA to buy their first home, while around 300,000 mortgages were completed by first-time buyers. That means up to 243,900 eligible savers may have lost out on a collective £243 million or more in unused bonuses.
Despite calls for reform, including a higher property price cap and fairer withdrawal rules, LISAs remain a powerful savings tool. Just bear in mind that if you withdraw for anything other than a first home or retirement, there’s a 25 per cent penalty, which can cost more than your bonus.
Here are three of the best ethical Lifetime ISA providers for 2025.
Moneybox
Fees: £1 per month (free for 3 months), platform fee 0.45 per cent, fund fees 0.12–0.30 per cent
Cash LISA interest: 4.50 per cent AER for the first year (then 3.30 per cent)
Moneybox is a simple, app-based savings platform that lets you round up spare change and direct it into savings or investments – including your Lifetime ISA. It offers both Cash LISAs and Stocks and Shares LISAs, making it a great starting point if you’re just getting into saving or investing.
Its ethical investing options are strong for beginners: the platform offers three risk-based portfolios (Cautious, Balanced, Adventurous), each of which can be toggled to a “Socially Responsible” version. These invest in global companies screened for strong environmental, social, and governance (ESG) performance.
If you’re more confident, you can build your own portfolio and choose funds that reflect your values. Moneybox primarily uses low-cost ETFs and tracker funds, which helps keep fees down. Just bear in mind that passive investing like this may have less direct impact than active fund choices. Moneybox has a useful “Housemates” feature, which enables you to track your savings progress alongside your buying partner’s.
Best for: New savers looking for simplicity, strong app features, and the option to go green without deep investment knowledge.
AJ Bell
Minimum investment: £25
Fees: 0.25 per cent (max £3.50 per month), fund fees vary
AJ Bell gives you access to a huge range of ethical investing options and is one of the best platforms if you want to take more control over your Stocks and Shares LISA. It offers screened ESG funds, as well as a curated list of actively-managed sustainable funds.
One standout option is the AJ Bell Responsible Growth Fund, which excludes harmful industries (like fossil fuels and arms) and invests in companies with positive ESG practices. This fund is largely made up of ETFs, so while it’s cost-effective, it’s still passively managed overall.
If you’re looking for more targeted ethical impact, AJ Bell’s Favourite Fund list includes excellent actively-managed choices such as Liontrust Sustainable Future Global Growth, Liontrust Sustainable Future UK Growth and Royal London Sustainable Leaders.
For those who prefer a simpler interface and lower fees, AJ Bell also runs Dodl, its minimalist investment app, which offers themed responsible investing portfolios like “A Greener World” and “The Good Guys”. These are tracker-based but align with ESG principles.
Best for: Ethical DIY investors who want wide fund choices and value for money, or those ready to step up from simpler platforms.
Hargreaves Lansdown
Minimum investment: £25/month
Fees: 0.25 per cent annual management fee (on funds), capped at £45 per year for shares
As the UK’s largest investment platform, Hargreaves Lansdown offers scale, service, and a huge range of investment options, including more than 3,700 funds, ETFs, investment trusts, and bonds.
While HL has traditionally been more mainstream, it now offers a growing range of sustainable funds suitable for your Stocks and Shares LISA. A leading ethical pick is the Legal & General Future World ESG Developed Index, which avoids investments in coal, tobacco, controversial weapons, and companies violating UN principles.
Best for: Savers who want access to one of the UK’s largest ethical fund selections and a trusted, full-service platform.
Plum
Minimum investment: £1
Fees: No fee for the basic plan; £2.99 per month for Plum Pro (includes Stocks and Shares LISA access)
Plum is a smart, automated money app that helps you save, budget, and invest with minimal effort. It now offers a Stocks and Shares Lifetime ISA, available through its Plum Pro plan, making it a flexible entry point for younger savers looking to build their first home deposit or retirement pot.
Plum uses AI to analyse your spending habits and move small amounts into savings or investments automatically, helping you build your LISA pot without thinking about it too much.
Its ESG-themed portfolio “Clean & Green” focuses on companies involved in renewable energy, clean water, and environmentally responsible business practices. As with Moneybox, Plum takes a low cost, passive investment approach (using ETFs).
Though Plum doesn’t give you the depth of fund choice that platforms like AJ Bell or HL do, its simplicity and automation make it a great stepping stone for savers who want to start ethically but aren’t ready to build their own portfolio from scratch.
Savers who want a hands-off, app-driven way to invest ethically with minimal effort.
Risk warning: With investment, your capital is at risk. Tax treatment depends on your individual circumstances and may be subject to change in the future.
Other ethical options for a Cash Lifetime ISA include Skipton Building Society, Newcastle Building Society, and Bath Building Society.
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