Lifetime ISA
Calculator UK 2026

It is being consulted on, not yet replaced. HM Treasury published its First Time Buyer ISA consultation on 23 June 2026, closing at 11:59pm on 18 August 2026. The consultation confirms that the new product will be offered in place of the Lifetime ISA and will be solely for buying a first home. Until it launches, the LISA rules on this page are the ones that apply. The consultation does not give a launch date — it says the government wants the product available 'as soon as practically possible'. Reports of an April 2028 start are press inference, not a figure in the consultation document.

The consultation is explicit that existing arrangements are protected: it will remain possible to open a Lifetime ISA, and LISA holders will be able to save into their LISA in line with the existing rules indefinitely. So opening one now does not forfeit the 25% bonus. Two things to weigh: LISA funds will NOT be transferable into the new First-Time Buyer ISA because a government bonus has already been paid on them, and you will be able to hold both products but only pay into one of them in the same tax year. If you are close to buying, the LISA's 12-month opening rule is usually the deciding factor.

Four things are settled in the consultation document. It will be for first-home purchase only, with no retirement use. It will be open to anyone aged 18 and over, with no upper age limit — the LISA's age-40 cut-off goes. There will be no withdrawal charge. And the government bonus will be paid as a percentage of what you have subscribed rather than the value of your account, at the point you withdraw to buy, which means the bonus is not paid on investment growth or interest. The bonus is paid at exchange, with 90 days to complete, and only where the purchase involves a mortgage — cash-only purchases do not qualify.

The three numbers that matter most are all undecided. The consultation states that the subscription limit, the property price cap and the level of the government bonus 'will be announced at a future fiscal event'. There is also no confirmed launch date. The next scheduled fiscal event is the Autumn Budget on 28 October 2026, so that is the realistic point at which those figures appear. Treat any specific FTB ISA bonus rate, annual limit or price cap you see quoted before then as speculation.

About 6.25% of your own money, not just the bonus. The 25% withdrawal charge is applied to the gross amount you take out, not to the bonus alone — and because the bonus was 25% added on top, taking 25% off the larger total claws back more than it gave. Worked example: you contribute £1,000, HMRC adds £250, giving £1,250. A non-qualifying withdrawal of the full £1,250 triggers a £312.50 charge, leaving £937.50 — £62.50 less than you put in, or 6.25%. On a £10,000 balance built from £8,000 of contributions the charge is £2,500 and you receive £7,500, a £500 shortfall. Growth is hit too: the charge takes 25% of investment returns and interest as well.

The Lifetime ISA was introduced in April 2017. It is a tax-free savings or investment account for UK residents aged 18-39, designed for first-home purchase or retirement (age 60+). The government adds a 25% bonus on contributions, up to £1,000 per tax year. Annual contribution limit is £4,000 (which counts toward the overall £20,000 ISA allowance). Account stays open until age 50, after which no further contributions or bonuses can be added but the existing balance continues to grow tax-free.

You must be a UK resident, aged 18-39 inclusive, and have a valid National Insurance number. Once opened before age 40, you can keep contributing until age 50 (provided you remain a UK resident or qualifying overseas Crown employee). Each individual can only open one LISA per tax year, but you can hold multiple LISAs and transfer between them. Joint accounts are not allowed.

HMRC pays a 25% bonus on your contributions, up to £1,000 maximum per tax year (which represents £4,000 contributed). The bonus is paid monthly into your LISA account, typically 4-9 weeks after each contribution. The bonus then earns investment returns alongside your own contributions. Across the maximum 32 contribution years (age 18-50), the maximum government top-up is £32,000 — before any investment growth on the bonus itself. Note that the proposed First-Time Buyer ISA would work differently: its bonus would be paid on subscriptions at the point of purchase, not monthly into the account.

Two qualifying uses without penalty: (1) First-home purchase — first-time buyer purchasing a UK residential property up to £450,000, with a mortgage from a UK lender, intended as your only or main residence. The LISA must have been open for at least 12 months before completion. (2) Retirement — any withdrawal after age 60. (3) Terminal illness — withdrawals are also allowed if you have less than 12 months to live. Any other withdrawal incurs a 25% government charge.

If you withdraw money for any reason other than first-home purchase, after age 60, or terminal illness, HMRC applies a 25% charge on the gross withdrawal amount. Because the bonus was 25% of your contributions, a 25% charge on the total balance recovers more than just the bonus — it also takes a portion of your original contributions and any growth. Example: £1,000 contributed becomes £1,250 with bonus; a non-qualifying withdrawal of £1,250 incurs £312.50 charge, leaving you with £937.50, less than your original £1,000.

No. The consultation is direct about this: individuals with funds in a Lifetime ISA have already received a government bonus and will not be able to transfer their LISA to the new FTB product. You will, however, be able to hold both accounts at the same time — you just will not be able to subscribe to both in the same tax year. This is worth planning around if you expect to be saving across the changeover.

You can hold both, but you can only use the bonus from one of them when buying your first home. Help to Buy ISAs closed to new accounts in November 2019, but existing accounts can keep contributing until November 2029. The Help to Buy property cap is £250,000 (£450,000 in London) compared to £450,000 nationwide for LISA. Most analyses since 2020 favour LISA for higher-priced homes outside London given the higher cap.

Workplace pensions get tax relief at your marginal rate (20%, 40%, or 45%) plus employer matching contributions, generally making them better for retirement saving — particularly for higher-rate taxpayers. LISAs offer 25% bonus regardless of tax band. Withdrawals from LISA after 60 are tax-free; pension withdrawals after 55 (rising to 57 from 2028) include 25% tax-free lump sum with the rest taxed as income. For first-home purchase, LISA is the dedicated vehicle since pensions cannot be accessed before retirement age. Note that the proposed replacement product would be for first-home purchase only, with no retirement route.

No. The LISA can only be opened between ages 18-39. If you turn 40 without an open LISA, you permanently lose the opportunity. Once opened, you can continue contributing until age 50 (so opening at 39 gives 11 years of contributions; opening at 18 gives 32 years). The full £1,000 annual bonus is available for each contribution year up to age 50. The proposed First-Time Buyer ISA would remove this age ceiling entirely — the consultation confirms no upper age limit, recognising that the age at which a first home is bought is rising.

Cash LISA holds your money in interest-bearing savings, similar to a Cash ISA. Interest rates as of 2026 typically range 3.5-4.75% AER. Stocks & Shares LISA invests in funds, ETFs, or shares. Historical UK equity total returns average 7-8% nominal per year over long periods, but capital is at risk. Cash LISA is generally suitable for short-term first-home savings (1-5 years); Stocks & Shares LISA is more common for retirement-focused savers with 10+ year horizons. The 25% bonus is identical either way — the difference is entirely what happens to the money afterwards. Major providers: Moneybox, Nutmeg, AJ Bell, Hargreaves Lansdown, Skipton Building Society (cash), Beehive Money (cash).

Once you turn 50, you cannot make further contributions and no further government bonus is paid. However, the existing balance stays in the LISA and continues to earn interest or investment returns tax-free until you withdraw it. Withdrawal rules remain the same — penalty-free for first-home purchase (only if it's still your first home) or after age 60 for retirement. The account is essentially in 'maintenance mode' from 50-60.