Lifetime ISA Calculator

Calculate your government bonus and savings potential for your first home or retirement

Important: Early withdrawals (except for first home purchase or after age 60) incur a 25% government charge, potentially returning less than you invested.
Total Savings After Years
£0
Your Contributions
£0
Government Bonus
£0
Investment Growth
£0

About Lifetime ISAs

A Lifetime ISA (LISA) is a tax-efficient savings account designed to help you save for your first home or retirement. The government provides a 25% bonus on contributions up to £4,000 per year, giving you up to £1,000 in free money annually.

Key Features

  • Available to UK residents aged 18-39 to open
  • Maximum annual contribution of £4,000
  • 25% government bonus (up to £1,000 per year)
  • Contributions allowed until age 50
  • Tax-free growth on investments and cash
  • Funds can be used for first home purchase or withdrawn at age 60

Eligibility Requirements

  • Be a UK resident
  • Aged between 18 and 39 to open an account
  • Must not have owned property before (for first home purchase)
  • Property value must not exceed £450,000 (for first home purchase)
  • Wait 12 months after opening before using funds for property purchase

How the Government Bonus Works

The government adds 25% to your contributions at the end of each tax year. For example, if you contribute £4,000, you receive a £1,000 bonus, giving you £5,000 total. This bonus is paid on contributions made between 6 April and 5 April the following year.

Withdrawal Rules

You can withdraw funds penalty-free in two circumstances: to purchase your first home (after 12 months) or from age 60 onwards. Other withdrawals incur a 25% charge, which removes the government bonus plus an additional penalty.

Frequently Asked Questions

What happens if I contribute more than £4,000 per year?
Contributions above £4,000 per tax year will not receive the government bonus and may be subject to penalties. The £4,000 limit is strict and cannot be carried over between tax years.
Can I have both a Help to Buy ISA and a Lifetime ISA?
Yes, you can hold both accounts, but you can only use the government bonus from one account when purchasing your first home. You cannot contribute to both accounts simultaneously.
What investment options are available?
Lifetime ISAs can hold cash deposits or stocks and shares investments. Cash LISAs offer guaranteed returns but typically lower growth, whilst stocks and shares LISAs offer higher potential returns but with investment risk.
Can I transfer from other ISAs into my Lifetime ISA?
Yes, you can transfer funds from other ISAs into your Lifetime ISA, but only the first £4,000 per tax year will qualify for the government bonus. Transfers don’t count towards your annual ISA allowance.
What happens to my LISA when I turn 50?
At age 50, you can no longer make contributions or receive government bonuses. However, your account remains open and continues to grow tax-free until you withdraw the funds at age 60 or later.

References

  1. HM Treasury. (2025). Lifetime ISA: Overview and Rules. GOV.UK. Retrieved from https://www.gov.uk/lifetime-isa
  2. Financial Conduct Authority. (2025). Individual Savings Account (ISA) Rules and Regulations. FCA Handbook.
  3. HM Revenue and Customs. (2025). ISA Allowances and Limits for Tax Year 2025-26. HMRC Guidelines.
  4. Office for National Statistics. (2025). UK House Prices and Property Market Statistics. ONS Housing Data.
  5. Bank of England. (2025). Interest Rates and Investment Growth Projections. Monetary Policy Committee Reports.

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