Lifetime ISA Calculator

A Lifetime ISA is one of the most generous savings schemes available to younger UK savers, offering a 25% government bonus on top of your own contributions. Our Lifetime ISA calculator projects how your balance could grow, including that bonus, whether you are saving towards a first home or for retirement.

The Basics: Who Can Open One, and the Limits

You can open a Lifetime ISA (LISA) between the ages of 18 and 39, and continue contributing up to age 50. You can pay in up to £4,000 each tax year — which counts towards your overall £20,000 annual ISA allowance, not on top of it — and the government adds a 25% bonus on whatever you contribute, up to a maximum bonus of £1,000 a year if you save the full £4,000. This bonus is paid monthly (in cash LISAs) or otherwise added periodically, and can then benefit from further investment growth if held in a stocks and shares LISA.

Two Ways to Use It: House or Retirement

A LISA can be used tax-free and penalty-free for two specific purposes: buying your first home (provided it costs £450,000 or less, and you have held the LISA for at least 12 months), or from age 60 onwards, for any purpose including retirement income. Used for either of these, the entire balance — your contributions, the government bonus, and any investment growth — is yours, completely free of tax or charges.

The 25% Withdrawal Charge: A Trap to Avoid

If you withdraw money from a LISA for any reason other than a qualifying first home purchase, reaching 60, or in cases of terminal illness, the government applies a 25% withdrawal charge on the amount taken out. This might sound like it simply cancels out the 25% bonus you received, but the maths actually works against you — because the charge is 25% of the full withdrawal amount (including your own original contribution), not just of the bonus, meaning you can end up with less than you originally paid in. This is one of the most important things to understand before opening a LISA for anything other than its two intended purposes.

A Worked Example

A 26-year-old contributing £250 a month (£3,000 a year, under the £4,000 limit) would receive a government bonus of £750 in that first year alone. Sustained over several years at an assumed 4.5% annual growth rate, the combination of contributions, bonus, and compounding growth typically builds a substantially larger deposit than saving the same amount without a LISA — often tens of thousands of pounds more by the time a first home purchase becomes realistic, purely from the bonus and the extra growth it generates along the way.

LISA vs Help to Buy ISA and Other Options

The Help to Buy ISA (no longer open to new savers, though existing accounts can still be used) offered a similar but less generous 25% bonus with a lower monthly limit. For most first-time buyers today, a LISA is the primary government-backed savings vehicle available, and is well worth combining with our Mortgage Deposit Savings Calculator to see your full savings timeline.

What Happens If You Change Your Mind About Buying

Life plans change, and it is worth knowing your options if you open a LISA intending to buy a home but circumstances shift. You can simply continue holding the account and use it towards retirement from age 60 instead, with no bonus lost and full tax-free access at that point. Alternatively, some LISA providers allow transfers to another LISA provider without triggering the withdrawal charge, which can be useful if you want to move to a better rate or a different investment approach while keeping your options open. The one scenario to genuinely avoid, where possible, is withdrawing the money for an unrelated purpose before age 60, since that is precisely when the 25% government withdrawal charge applies and can leave you worse off than if you had never claimed the bonus at all.

Frequently Asked Questions