Lifetime ISA (LISA) Calculator
Project your Lifetime ISA balance with the 25% government bonus. See year-by-year growth, compare LISA vs pension, and understand withdrawal penalties — whether you're saving for your first home or retirement.
Projected Balance
£250,567
After 25 years
Total Government Bonus
£25,000
25% on your contributions
Total Investment Growth
£125,567
Tax-free inside your ISA
£1,000 free money each year
The government adds 25% to your £4,000 contribution — up to £1,000/year
First Home Purchase Rules
- • Property must cost £450,000 or less
- • LISA must be open for at least 12 months before withdrawal
- • Must be a first-time buyer (never owned property)
- • Purchase through a conveyancer/solicitor (not auction)
- • Withdraw the full balance — bonus included, no penalty
| Year | Age | Contribution | Bonus | Growth | Balance |
|---|---|---|---|---|---|
| 1 | 26 | £4,000 | +£1,000 | £250 | £5,250 |
| 2 | 27 | £4,000 | +£1,000 | £513 | £10,763 |
| 3 | 28 | £4,000 | +£1,000 | £788 | £16,551 |
| 4 | 29 | £4,000 | +£1,000 | £1,078 | £22,628 |
| 5 | 30 | £4,000 | +£1,000 | £1,381 | £29,010 |
| 6 | 31 | £4,000 | +£1,000 | £1,700 | £35,710 |
| 7 | 32 | £4,000 | +£1,000 | £2,036 | £42,746 |
| 8 | 33 | £4,000 | +£1,000 | £2,387 | £50,133 |
| 9 | 34 | £4,000 | +£1,000 | £2,757 | £57,889 |
| 10 | 35 | £4,000 | +£1,000 | £3,144 | £66,034 |
What happens if you withdraw for something other than a first home or after 60?
Compare the same contribution to a LISA vs a workplace pension
Lifetime ISA at a Glance
Annual Limit
£4,000
Government Bonus
25% (up to £1,000/year)
Eligible Age
18–39 to open
Property Cap
£450,000
How the Lifetime ISA Works
The Lifetime ISA was introduced in April 2017 to help people save for their first home or retirement. You can save up to £4,000 per tax year, and the government tops it up with a 25% bonus — that's up to £1,000 in free money every year.
The bonus is paid monthly (within 6–8 weeks of your contribution) and your total LISA contributions count toward your overall £20,000 annual ISA allowance. All growth inside the LISA — interest or investment returns — is completely tax-free.
You can open a LISA between ages 18 and 39, and continue contributing until the tax year you turn 50. After that, the account stays open and continues to grow tax-free, but you cannot add more money.
When Can You Withdraw?
Penalty-free withdrawals:
- Buying your first home (property up to £450,000, LISA open 12+ months)
- After age 60 for any purpose
- Terminal illness (life expectancy under 12 months)
Early/unauthorised withdrawal:
A 25% government charge applies to the full amount you withdraw (including the bonus). This means you get back less than you put in — you lose the bonus and about 6.25% of your own money. For example, withdrawing £5,000 means a £1,250 charge, leaving you with £3,750.
Frequently asked questions
What is a Lifetime ISA (LISA)?
A Lifetime ISA is a tax-free savings account for 18–39 year olds. You can save up to £4,000 per year and the government adds a 25% bonus — up to £1,000 free each year. You can use it to buy your first home (up to £450,000) or withdraw penalty-free after age 60 for retirement.
What is the LISA withdrawal penalty?
If you withdraw from a LISA for any reason other than buying your first home or after age 60, you pay a 25% government withdrawal charge on the total amount (including the bonus). This means you lose the bonus and approximately 6.25% of your own contributions. For example, withdrawing £5,000 incurs a £1,250 charge, leaving you with £3,750.
Is a LISA better than a pension?
It depends on your tax rate. For basic rate taxpayers (20%), the LISA 25% bonus is equivalent to pension tax relief — both effectively add 25% to your money. For higher rate taxpayers (40%+), a pension gives more upfront relief. However, LISA withdrawals are 100% tax-free, while only 25% of a pension is tax-free. LISAs also let you buy a first home, and have no minimum access age for property purchases.
Can I have a LISA and a pension?
Yes, and many financial advisers recommend having both. Your LISA contributions count toward your £20,000 ISA allowance, while pension contributions have a separate £60,000 Annual Allowance. Using both gives you flexibility — the LISA for a first home or tax-free retirement income, and the pension for larger contributions and employer matching.
What is the maximum property price for a LISA first home?
The property must cost £450,000 or less to use your LISA for a first-home purchase. This applies across the whole UK, including London. The LISA must have been open for at least 12 months before you can use it to buy a property.
How much can I save in a Lifetime ISA?
You can contribute up to £4,000 per tax year to a LISA, which counts toward your overall £20,000 ISA allowance. With the 25% government bonus, that's £5,000 per year going into your account. You can continue contributing until age 50, giving a maximum of 32 years of contributions if you open at 18.
Sources
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