Lifetime ISA Calculator
See how a Lifetime ISA could grow with the 25% government bonus, whether you're saving for a first home or for retirement.
Pay in the full £4,000 a year and the government adds £1,000. Over five years, that's £20,000 of your money plus £5,000 of bonus, before any interest. At 4% a year, the account would be worth about £27,600 by the time you buy.
The 25% withdrawal charge is the catch. It's taken from the whole amount you withdraw, including the bonus, so it costs more than the bonus added:
| You pay in | £1,000.00 |
| Government bonus (25%) | £250.00 |
| Balance | £1,250.00 |
| 25% charge on an early withdrawal | −£312.50 |
| You get back | £937.50 |
So only use a Lifetime ISA for money you're fairly sure will go on a first home under £450,000, or that you can leave until you're 60.
How much can I put in a Lifetime ISA?
Up to £4,000 each tax year, and the government adds a 25% bonus of up to £1,000 a year. The £4,000 counts towards your overall £20,000 ISA allowance for 2026/27.
Who can open a Lifetime ISA?
You must be 18 or over but under 40, and resident in the UK (or a member of the armed forces or a Crown servant posted abroad). You can keep paying in and getting the bonus until you turn 50.
What can I use a Lifetime ISA for?
Buying your first home costing £450,000 or less, at least 12 months after your first payment and with a mortgage, or withdrawing from age 60 for any reason. You can also withdraw if you are terminally ill with less than 12 months to live.
What happens if I take money out early?
Any other withdrawal has a 25% charge on the amount you take out. Because that is more than the 25% bonus you were given, you get back less than you paid in. For every £1,000 you save, the account holds £1,250, and a 25% charge on £1,250 leaves you with £937.50.
Should I use a Lifetime ISA or a pension for retirement?
For higher rate taxpayers, and anyone whose employer matches pension contributions, a workplace pension usually gives more. A Lifetime ISA can suit basic rate taxpayers and the self-employed, because withdrawals after 60 are tax-free. It depends on your situation, so compare both.
Source: GOV.UK: Lifetime ISA. Projections assume a steady rate and the current rules. General information, not financial advice.
| Yearly limit | £4,000 |
| Government bonus | 25%, up to £1,000 |
| Open between | 18 and 39 |
| Pay in until | Age 50 |
| First home limit | £450,000 |
| Early withdrawal | 25% charge |