🎯 UK Lifetime ISA Calculator

The Lifetime ISA (LISA) is a tax-efficient savings and investment account introduced by the UK government in 2017, designed to help adults save for their first home or for retirement. The most powerful feature of a LISA is the 25% government bonus: for every GBP 4 you contribute, HMRC adds GBP 1, meaning a maximum annual contribution of GBP 4,000 earns you a bonus of up to GBP 1,000 per tax year, free.

To open a LISA you must be aged between 18 and 39 inclusive. You can continue to contribute and receive the government bonus until your 50th birthday, after which no further contributions qualify for the bonus. The GBP 4,000 annual LISA limit counts toward your overall ISA allowance of GBP 20,000 per tax year, not in addition to it.

Money inside a LISA grows tax-free (no Income Tax on interest or dividends, and no Capital Gains Tax on investment growth). The key advantage becomes apparent when the money is left to grow over decades: the combination of the annual 25% bonus and tax-free compound growth can build a substantial retirement pot, especially for younger savers who have 30 or 40 years of growth ahead.

Withdrawal rules are strict. You can withdraw money tax-free and penalty-free from your LISA only under two circumstances: (1) to buy your first home (the property must cost no more than GBP 450,000, and you must use a residential mortgage, with the LISA held for at least 12 months before withdrawal), or (2) from age 60 onwards for any purpose. If you withdraw for any other reason (known as an unauthorised withdrawal), a 25% government withdrawal charge applies.

The 25% withdrawal charge is calculated on the total withdrawal amount, including any growth on your own contributions. Because the government bonus was 25% of your contributions but the charge is 25% of the total withdrawal, an unauthorised withdrawal leaves you with less than you put in: for every GBP 100 you contribute (earning GBP 25 bonus), a full unauthorised withdrawal of the GBP 125 pot incurs a GBP 31.25 charge, leaving you with GBP 93.75 from your GBP 100 contribution. This asymmetry is why LISAs should be treated as a long-term commitment.

This calculator projects the future value of a LISA to age 60, including the cumulative government bonus received and the effect of compound growth on contributions and bonuses.

The calculator takes five inputs: your annual contribution (capped at GBP 4,000), your current age (must be under 50 for the contribution to qualify for the bonus), your initial LISA balance (if any), your expected annual growth rate as a percentage, and the number of years until you turn 60 (calculated automatically from your age).

The model assumes you contribute the same amount every year from now until age 50, receiving the 25% government bonus each year, and then let the accumulated pot grow (without further contributions) until age 60. Growth is compounded annually on the total balance (your contributions plus bonuses plus existing balance).

For each year of contribution, the bonus is calculated as:

Government bonus = Annual contribution x 25%

The accumulated balance at age 60 is the future value of a growing annuity. The table below shows a worked example for someone aged 25 contributing the full GBP 4,000 per year until age 50, with 5% annual growth:

This is an illustration only; actual returns will depend on the investments you choose and can go down as well as up.

1. Enter your planned annual LISA contribution (maximum GBP 4,000).
2. Enter your current age (must be under 50 for bonus eligibility).
3. Enter any existing LISA balance.
4. Enter your expected annual growth rate as a percentage.
5. Click Calculate to see your government bonus, projected balance at 60, and total bonuses.

Who can open a Lifetime ISA?

You can open a LISA if you are aged between 18 and 39. You can continue to contribute and receive the 25% government bonus until your 50th birthday. After 50, the account can stay open and grow, but new contributions will not receive the bonus.

What is the maximum I can contribute to a LISA?

The annual LISA contribution limit is GBP 4,000 per tax year. This counts toward your overall GBP 20,000 ISA allowance. The maximum government bonus you can receive is therefore GBP 1,000 per year.

What happens if I withdraw money for a reason other than a first home or retirement?

A 25% government withdrawal charge applies to unauthorised withdrawals (those made before age 60 for purposes other than buying a first home). Because the charge is levied on the total amount withdrawn (including growth on your own money), you can end up with less than you originally contributed.

Can I use a LISA to buy any property?

You can withdraw from a LISA tax-free and penalty-free to buy your first home, provided the property costs no more than GBP 450,000, you are buying with a residential mortgage, and you have held the LISA for at least 12 months. The GBP 450,000 cap applies nationwide and is not adjusted for regional price differences.

How does the LISA compare with a workplace pension?

A LISA gives a flat 25% government bonus (equivalent to 20% tax relief for basic-rate taxpayers) and withdrawals are tax-free. A workplace pension gives tax relief at your marginal rate (20%, 40%, or 45%) and employer matching contributions, but withdrawals are taxed as income. Higher and additional-rate taxpayers usually do better with a pension. Basic-rate taxpayers may prefer a LISA, especially if they value tax-free withdrawals.

This tool is for informational purposes only and does not constitute financial advice. Consult a qualified financial professional for advice specific to your situation.

The biggest decision with a LISA is whether it suits your goals. If you are definitely saving for a first home under GBP 450,000, a LISA is hard to beat: the 25% bonus is an instant 25% return before any investment growth. For retirement, compare it against a workplace pension: pensions give tax relief at your marginal rate (so 20% for basic-rate taxpayers, 40% or 45% for higher and additional-rate taxpayers), while a LISA gives a flat 25% bonus (equivalent to 20% tax relief for a basic-rate taxpayer). Higher-rate taxpayers usually do better with a pension; basic-rate taxpayers may prefer a LISA for its flexibility at retirement (no Income Tax on withdrawals from a LISA, but pension withdrawals are taxed as income). Maximise the full GBP 4,000 each year if you can, because you lose any unused LISA allowance at the end of the tax year (it does not roll forward). Be absolutely sure you will use the LISA for a first home or retirement: the 25% unauthorised withdrawal penalty means you can get back less than you put in. If you need the money earlier, consider a Stocks and Shares ISA (no bonus, but full flexibility) instead. Finally, check whether your employer offers a matching scheme for LISAs (rare) or pensions (common) before deciding where to direct extra savings.