Lifetime ISA Bonus Calculator
Project a Lifetime ISA month by month: the 25% government bonus (up to £1,000 a year), growth after fees, the age-50 cut-off, a first-home check against the £450,000 cap with a partner’s LISA and deposit target, the value at 60, and what the 25% withdrawal charge would cost.
How it works
bonus = 25% × contributions (max £4,000 a year → £1,000 bonus), paid until age 50 balance: each month add contribution × 1.25, then grow by (1 + return − fees)^(1/12) unauthorised withdrawal charge = 25% of the amount taken · to receive £X, withdraw £X ÷ 0.75 first home: price ≤ £450,000, bought with a mortgage, at least 12 months after the first payment
A Lifetime ISA adds a 25% government bonus to whatever you pay in, up to £4,000 a tax year — so up to £1,000 a year free. You open it between 18 and 39 and can keep paying in (and collecting the bonus) until the day before you turn 50; after that the money stays invested. It can be withdrawn without a charge to buy your first home (£450,000 or less, with a mortgage, at least 12 months after your first payment), from age 60, or if you are terminally ill. Any other withdrawal pays a 25% charge on the amount taken, which removes the bonus and about 6.25% of your own money. The calculator runs the account month by month at your expected return after fees, stops contributions at 50, and shows the same money in an ordinary ISA so you can see what the bonus adds. For a home it checks the price cap, adds a partner’s LISA if you buy together, and compares the total with your deposit target; for an early withdrawal it shows the charge, and how much you must take out to receive a given amount. Your LISA payments use part of the £20,000 overall ISA allowance. In 2026 the government consulted on a First Time Buyer ISA to replace the LISA for new savers; existing accounts keep the current rules.
Worked example
£333 a month for five years at 4% (bonus credited monthly): £19,980 paid in, £4,995 of bonus and £2,662 of growth make £27,637 towards a deposit — £5,527 more than the same money in an ordinary ISA. On a £350,000 home that is a 7.9% deposit; with a partner saving the same amount it becomes £55,274, or 15.8%. Taken out for anything else, the 25% charge would be £6,909, leaving £20,728: still a little more than the £19,980 paid in thanks to five years of growth, but £1,382 less than an ordinary ISA. Paying £4,000 every April from 26 until 50 and leaving it to 60 at 4% would give about £300,800, £24,000 of it bonus.
Sources: GOV.UK — Lifetime ISA · GOV.UK — First Time Buyer ISA: consultation (2026) · GOV.UK — Tax-free savings newsletter 22, June 2026
Frequently asked questions
Can a couple each use one?
Yes. Two first-time buyers can each use their own Lifetime ISA, with both bonuses, on the same purchase, as long as the home costs £450,000 or less. Turn on the partner option to see the combined deposit.
LISA or pension?
The 25% bonus is the same as basic-rate tax relief on a pension. Higher-rate taxpayers usually get more from a pension, and an employer may add contributions too. LISA money taken out at 60 is tax-free, while most pension income is taxed.
How much does the withdrawal charge really cost?
The charge is 25% of what you take out. Because the bonus was only 20% of the total (25% of your contribution), you lose the bonus plus about 6.25% of your own money. To receive £1,000 in cash you would withdraw £1,333.33.
What happens at 50?
You can no longer pay in or earn the bonus, but the account stays open and keeps earning interest or investment growth until you take the money out, penalty-free, from 60.
Is the Lifetime ISA being scrapped?
The government plans to replace it with a new First Time Buyer ISA (consultation closed August 2026). Until the new product launches, you can still open a LISA, and existing holders can keep saving into theirs under the current rules. The new product’s bonus and limits are still to be announced.
Related calculators
Uses the 2026/27 Lifetime ISA rules (25% bonus on up to £4,000 a year, £450,000 first-home cap, 25% withdrawal charge). Projections are not guaranteed — returns can be lower and investments can fall. Educational estimate, not financial advice; check GOV.UK for the current rules.