Lifetime ISA
Calculator UK 2026
See how a Lifetime ISA grows with the 25% government bonus, what an early withdrawal really costs you, and how the LISA compares with the First-Time Buyer ISA whose consultation closed on 18 August 2026.
Read the full answer — method, rates and figures
Quick answer: Lifetime ISA (LISA) limits and bonuses for 2026-27, unchanged: £4,000 annual contribution cap, 25% government bonus = up to £1,000/year, max £32,000 lifetime bonus (age 18-50). Eligibility: UK resident aged 18-39 to open; can contribute until 50.
Penalty-free withdrawal only for a first home up to £450,000 (after the 12-month opening period), from age 60, or on terminal illness. Any other withdrawal incurs a 25% HMRC charge on the gross amount, which costs about 6.25% of your OWN money — £1,000 contributed becomes £1,250 with the bonus, and a non-qualifying withdrawal returns £937.50.
SEPARATELY, the LISA is being consulted on for replacement, and that consultation has now CLOSED: HM Treasury's First Time Buyer ISA consultation closed at 11:59pm on 18 August 2026 and GOV.UK lists it as closed with responses under analysis. No government response has been published, so none of it is law.
Confirmed in that document: the new product is for first-home purchase only, open to anyone aged 18+ with no upper age limit, with NO withdrawal charge, and a bonus paid on subscriptions (not account value) at the point of purchase, only where a mortgage is involved. NOT yet decided: the bonus level, the subscription limit, the property price cap and the launch date — all deferred to a future fiscal event, the next being the Autumn Budget on 28 October 2026, which is now the realistic point for the consultation outcome and those figures to appear together.
The widely repeated April 2028 start date is press inference, not in the consultation document. Existing LISAs are protected: you can still open one and keep saving into it indefinitely, but LISA funds cannot be transferred into the new product.
Source: GOV.UK 'First Time Buyer ISA: Consultation' and gov.uk/lifetime-isa.
25% bonus = £1,000 per year (max £1,000)
Cash LISA: 3.5-4.75% AER · Stocks & Shares LISA (equity blend): 5-8% nominal long-term
Final Balance (age 60)
£411,858
Your Contributions
£88,000
Government Bonus
£22,000
Investment Growth
£301,858
What this means
Contributing £4,000/year from age 28 to 49 gives 22 years of contributions totalling £88,000. HMRC adds £22,000 (25% of your contributions) as a 25% bonus, paid monthly. At 6.0% annual return, investment growth on the combined balance compounds to £301,858, giving a final balance of £411,858 at age 60. Withdrawals after age 60 are tax-free; before age 60 (other than first home or terminal illness) incur a 25% HMRC charge.
What does taking money out of a LISA early actually cost?
If you withdraw for anything other than a first home under £450,000, age 60+, or terminal illness, HMRC applies a 25% charge to the gross amount you take out — not to the bonus alone. Because the bonus was 25% added on top, taking 25% off the bigger total claws back more than it gave, so you end up below your own contributions. Enter your balance to see the shortfall.
The rest is the government bonus plus any growth. A maxed-out LISA with no growth is 80% contributions, 20% bonus.
25% HMRC charge
£2,500
You receive
£7,500
vs your own money
−£500
Loss on your own money
6.25%
Reading this result
On a £10,000 balance the charge is £2,500.00, leaving £7,500.00 in your hand. Against the £8,000 you put in yourself, that is a shortfall of £500.00 — 6.25% of your own contributions. The often-quoted 6.25% figure is the case with no investment growth: contributions of £8,000 become £10,000 with the bonus, the charge takes £2,500, and £7,500 comes back. Where the account has grown, the charge takes a quarter of that growth as well, but you keep the other three quarters, so growth shrinks the shortfall: once growth reaches about 8.3% of what you paid in yourself, the money you get back matches your own contributions, and above that you come out ahead despite the charge.
Cash LISA or Stocks and Shares LISA — how much does the choice matter?
The 25% government bonus is identical in both. The only difference is what happens to the money afterwards, which is why the choice matters far more over a long retirement horizon than over a two-year house deposit. Both lines below use the same £4,000/year from age 28 to age 60.
Cash LISA at age 60
£263,616
Stocks & Shares LISA at age 60
£515,749
Difference
£252,133
Over 32 years the gap is £252,133 on identical contributions and an identical £22,000 bonus. That gap is not free: a Stocks and Shares LISA can fall as well as rise, and a deposit you need within five years is the classic case for taking the cash rate instead. Providers also differ — Cash LISAs come mainly from building societies, while Stocks and Shares LISAs come from investment platforms with their own charges, which this projection does not deduct.
Is the Lifetime ISA being replaced?
Not yet — and the consultation on replacing it has now closed. HM Treasury's First Time Buyer ISA consultation closed at 11:59pm on 18 August 2026, and GOV.UK lists it as a closed consultation with responses under analysis. No outcome document has been published and nothing has been legislated, so nothing has changed for existing LISAs: the rules modelled above are current law for 2026-27.
What happens next is a date, not a guess. The consultation defers its three key numbers to “a future fiscal event”, and the next scheduled one is the Autumn Budget on 28 October 2026. Until then the consultation is unusually clear about which parts are settled and which are not, and the difference matters if you are deciding where to put a deposit this year.
Settled in the consultation document
- The new account would be solely for buying a first home. There is no retirement route, unlike the LISA's age-60 option.
- Anyone aged 18 or over could open one, with no upper age limit — the LISA's age-40 cut-off goes, explicitly because the age of first purchase is rising.
- There would be no withdrawal charge. You would simply not get the bonus if you used the money for something else.
- The bonus would be paid on what you subscribed, not on the account value, at the point you withdraw to buy — so not on interest or investment growth.
- It would be paid at exchange, with 90 days to complete, and only where the purchase involves a mortgage. Cash-only purchases would not qualify.
- Your existing LISA is protected: you can still open one and keep saving into it indefinitely under current rules.
- LISA funds could not be transferred in, because a bonus has already been paid on them. You could hold both, but pay into only one per tax year.
Explicitly not decided yet
- The level of the government bonus. The LISA's 25% is not carried over automatically.
- The annual subscription limit.
- The property price cap — the LISA's £450,000 has been frozen since 2017 and is the most-criticised part of the current product.
- The launch date. The document says only that the government wants it available as soon as practically possible.
The consultation states those figures will be announced “at a future fiscal event”. The next scheduled one is the Autumn Budget on 28 October 2026, which is the realistic point for them to appear. Any specific FTB ISA bonus rate, limit or price cap quoted before then — including the widely repeated April 2028 start date — is speculation rather than policy.
Sources: GOV.UK, “First Time Buyer ISA: Consultation” (closed 11:59pm 18 August 2026; GOV.UK status “Closed consultation — we are analysing your feedback”, checked 28 August 2026) for the replacement product, including the no-withdrawal-charge, no-upper-age-limit, bonus-on-subscriptions, mortgage-only and no-LISA-transfer points, and for the statement that the subscription limit, property price cap and bonus level will be announced at a future fiscal event. GOV.UK, “Lifetime ISA” guidance, for the current £4,000 annual limit, the 25% bonus capped at £1,000 a year, the 18-39 opening window, the age-50 contribution end, the £450,000 property cap and the 25% withdrawal charge. Related: our UK ISA calculator, Cash ISA allowance calculator for the separate 6 April 2027 cash-limit change, and the Autumn Budget 2026 tracker.
This calculator is for education only and is not financial, tax or legal advice. The Lifetime ISA figures modelled above are current law for 2026-27. The First-Time Buyer ISA is a closed consultation awaiting a government response, not law — its bonus rate, subscription limit, property price cap and start date are all undecided, so nothing here should be read as a commitment that it will take any particular form. The projections simplify: they assume contributions are made at the start of each year, a constant return, no provider charges, no withdrawals before the target age, and no change to the £4,000 limit or the 25% bonus. Investments can fall as well as rise. Last updated: 28 August 2026. Verify the current rules on gov.uk and speak to a regulated financial adviser before acting.
Last reviewed 19 September 2026 by the Richify AI agent team.
Reviewed by Felix, Richify's AI CFO — an AI author, presented as one.
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The Lifetime ISA combines a 25% government bonus with the tax-free wrapper of an ISA. Three components determine your final balance:
- Your contributions — up to £4,000 per tax year, deposited into a Cash LISA (interest-bearing) or Stocks & Shares LISA (invested).
- Government bonus — 25% of contributions, paid monthly by HMRC. Maximum £1,000 per year, £32,000 across the lifetime of the account if opened at 18 and contributed maximum annually until 50.
- Investment growth — interest (cash) or capital gains and dividends (S&S) compound tax-free within the ISA wrapper.
Withdrawals are penalty-free only for: (1) buying your first home up to £450,000 after the LISA has been open ≥12 months, (2) any reason after age 60, or (3) terminal illness. All other withdrawals incur a 25% HMRC charge on the gross amount, which mathematically returns less than your original contribution.
The LISA is also being consulted on for replacement. HM Treasury's First Time Buyer ISA consultation closed on 18 August 2026 and the responses are being analysed; the new product would be for first-home purchase only, with no upper age limit and no withdrawal charge, but its bonus rate, subscription limit and property price cap are all deferred to a future fiscal event. Existing LISAs are protected and can still be opened and paid into. See our Autumn Budget 2026 tracker for where those numbers are expected to land, and the Cash ISA allowance calculator for the separate 2027 cash-limit change. Sources: GOV.UK “First Time Buyer ISA: Consultation” (closed 18 August 2026); GOV.UK “Lifetime ISA” guidance. Last updated: 28 August 2026 — verify on gov.uk before acting.
How much is the Lifetime ISA bonus?
The government adds 25% of whatever you pay in, up to the £4,000 annual cap — so a maximum of £1,000 a year.
It is a bonus on contributions, not on your account value, so it does not grow just because your investments do. HMRC pays it monthly, typically four to nine weeks after each contribution, which means money paid in early in the tax year starts earning growth on its bonus sooner.
| You pay in (tax year) | Bonus | Total added |
|---|---|---|
| £1,000 | £250 | £1,250 |
| £2,000 | £500 | £2,500 |
| £3,000 | £750 | £3,750 |
| £4,000 (the cap) | £1,000 | £5,000 |
Over a full run — opening at 18 and paying the cap every year until contributions stop at 50 — the bonus totals £32,000. That is the ceiling, and it needs 32 unbroken years of maximum contributions.
How much will my Lifetime ISA be worth?
Three things drive the answer: what you pay in, the 25% bonus on top, and growth on both. Paying the full £4,000 means £5,000 a year going to work for you.
| Years at £4,000/yr | You paid | Bonus | Growth | Total |
|---|---|---|---|---|
| 10 years | £40,000 | £10,000 | £16,034 | £66,034 |
| 20 years | £80,000 | £20,000 | £73,596 | £173,596 |
| 30 years | £120,000 | £30,000 | £198,804 | £348,804 |
Illustration only, not a forecast: £5,000 added at the start of each year (as the calculator above does) and compounded at 5% a year, with no fees and no missed years. Change the return in the calculator above to see how sensitive it is — the growth column moves far more than the other two. A 30-year run also means opening by age 20, since contributions must stop at 50. A cash LISA will not compound like this; see the cash-versus-stocks section above.
Can you pay more than £4,000 into a Lifetime ISA?
No. £4,000 is a hard cap per tax year, and no bonus is due on anything above it. Your provider should reject an over-payment; if one slips through it has to be put right, and the excess earns nothing.
The £4,000 is not a separate allowance either — it comes out of your £20,000 overall ISA allowance, leaving £16,000 for cash, stocks and shares or innovative finance ISAs in the same year.
The allowance does not carry forward. Whatever you have not used by 5 April is gone, along with the bonus it would have earned — which is the real reason to fund a LISA early in the tax year rather than late.
How to use this calculator
- Enter your current age (must be 18-39 to open a new LISA, with last contribution allowed at age 49). Each year of contribution maximises the £1,000 government bonus.
- Set your annual contribution. The maximum is £4,000 per tax year, which earns the maximum £1,000 government bonus. Contributions count toward your overall £20,000 ISA allowance, so plan total ISA savings accordingly.
- Choose your goal: first-home purchase (any time after the 12-month opening period) or retirement (age 60+). The calculator projects to age 60 by default.
- Adjust the annual investment return rate. Cash LISAs offer 3.5-4.75% AER (low risk); Stocks & Shares LISAs target 5-8% nominal long-term equity returns (capital at risk). Historical UK FTSE All-Share total returns: ~7-8% nominal.
- Review the year-by-year breakdown showing your contributions, accumulated government bonus, investment growth, and total balance at each age.
- Use the withdrawal-charge section to see what a non-qualifying withdrawal would actually cost you — the 25% charge takes roughly 6.25% of your own money, not just the bonus.
❓ Frequently Asked Questions
Is the Lifetime ISA being replaced?
Not yet — but the consultation on replacing it has closed. HM Treasury's First Time Buyer ISA consultation closed at 11:59pm on 18 August 2026, and GOV.UK now lists it as a closed consultation with responses under analysis.
No outcome document has been published, so nothing has been legislated and nothing has changed for existing LISAs: the rules on this page are the ones that apply. The consultation confirms the new product would be offered in place of the Lifetime ISA and would be solely for buying a first home.
It gives no launch date — only that the government wants it available 'as soon as practically possible'. Reports of an April 2028 start are press inference, not a figure in the consultation document.
Should I still open a Lifetime ISA in 2026?
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.
What is confirmed about the new First-Time Buyer ISA?
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.
What is NOT yet decided about the First-Time Buyer ISA?
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.
How much do I actually lose if I withdraw from my LISA early?
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.
What is a Lifetime ISA (LISA)?
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.
Who is eligible to open a Lifetime ISA?
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.
How does the 25% government bonus work?
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.
What can I use a Lifetime ISA for?
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.
What is the 25% withdrawal penalty?
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.
Can I transfer my Lifetime ISA into the new First-Time Buyer ISA?
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.
Can I use a LISA alongside a Help to Buy ISA?
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.
How does LISA compare to a workplace pension?
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.
Can I open a LISA after age 40?
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 vs Stocks & Shares LISA — what's the difference?
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).
What happens to my LISA after I turn 50?
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.
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Further Reading
Track Your LISA Bonus Against Everything Else You Own
Richify puts your Lifetime ISA alongside your other ISAs, pensions and savings, so you can see whether the £1,000 bonus is worth locking money up for — and what an early withdrawal would really cost you. Free, no ads.
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