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Lifetime ISA Calculator 2025 – UK LISA Bonus Estimator Updated February 2026
Calculate Your Lifetime ISA Bonus
See how much government bonus you could accumulate for your first home or retirement. Plan your savings strategy today.
Use Calculator NowThe Lifetime ISA (LISA) is one of the most generous government savings incentives available to UK residents aged 18-39. Whether you're saving for your first home or planning for retirement, the LISA offers a 25% government bonus on your contributions - potentially worth up to £33,000 over your lifetime. Our free Lifetime ISA calculator helps you understand how much bonus you could receive and plan your savings strategy.
Unlike the now-closed Help to Buy ISA, the Lifetime ISA is still open to new applicants and offers greater flexibility with higher contribution limits and bonuses paid monthly rather than at property purchase.
What Is a Lifetime ISA?
A Lifetime ISA is a tax-free savings account designed specifically for two purposes: buying your first home and saving for retirement. Key features include:
- 25% Government Bonus: The government adds £1 for every £4 you save, paid monthly
- Annual Limit: You can save up to £4,000 per tax year
- £1,000 Annual Bonus: Maximum government contribution per year
- Two Uses: First home purchase (up to £450,000) or retirement savings (from age 60)
- Age Restrictions: Must open before age 40, can contribute until age 50
Key Takeaways
- Maximum Bonus: Up to £33,000 over lifetime (£1,000/year × 33 years)
- Open Before 40: Must open account before your 40th birthday
- Contribute Until 50: Can add money until age 50
- Property Limit: Up to £450,000 anywhere in UK
- Retirement Age: Access at 60 penalty-free
How Does the Lifetime ISA Work?
The Lifetime ISA operates on a simple but powerful principle: regular monthly bonuses that compound over time.
The Monthly Bonus System
Unlike the Help to Buy ISA where the bonus is paid at property purchase, LISA bonuses are added to your account each month. This means:
- Your bonus earns interest immediately
- You benefit from compound growth on the bonus
- You can see your bonus building in real-time
Annual Bonus = Up to £1,000 (£4,000 contributions × 25%)
Tax-Free Growth
All money in your LISA grows completely tax-free. This includes:
- Your contributions
- The government bonus
- Any interest or investment returns
- All withdrawals for eligible purposes
How to Use Our Lifetime ISA Calculator
Our calculator helps you model different savings scenarios:
- Enter Your Age: Input your current age (must be 18-39 to open)
- Set Annual Contribution: Enter how much you plan to save each year (up to £4,000)
- Choose Your Goal: Select "First Home" or "Retirement" (or both)
- Target Timeline: Set when you plan to buy or retire
- Add Current Savings: Include any existing LISA balance
- View Results: See total contributions, bonuses, and projected value
Example Calculation - First Home Purchase
Scenario: Sarah, aged 25, opens a LISA and saves the maximum £4,000/year for 5 years to buy her first home.
- Annual contribution: £4,000 × 5 years = £20,000
- Government bonus: £1,000 × 5 years = £5,000
- Interest/returns (estimated 3%): ~£1,500
- Total available for home purchase: ~£26,500
This represents a 25% return on her contributions just from the government bonus alone, plus additional growth from interest.
Understanding the 25% Bonus Structure
The LISA bonus structure is straightforward but powerful:
| Your Annual Contribution | Government Bonus (25%) | Total in LISA |
|---|---|---|
| £1,000 | £250 | £1,250 |
| £2,000 | £500 | £2,500 |
| £3,000 | £750 | £3,750 |
| £4,000 (maximum) | £1,000 | £5,000 |
Lifetime Maximum Bonus
If you open a LISA at 18 and contribute the maximum £4,000 every year until age 50:
- Years contributing: 32 years (ages 18-50)
- Your total contributions: £128,000
- Government bonuses: £32,000
- Combined total: £160,000 (before interest/investment growth)
Compound Growth Power
With estimated 5% annual returns, a maximum-contribution LISA opened at 18 could grow to over £400,000 by age 60, providing a significant retirement fund alongside your pension.
Contribution Limits & Annual Allowances
The £4,000 Annual Cap
You can contribute up to £4,000 per tax year to your LISA. This counts toward your overall annual ISA allowance (£20,000 for 2024-25), meaning you can save £4,000 in a LISA and up to £16,000 in other ISAs.
Tax Year Timing
The LISA allowance runs with the tax year (6 April to 5 April). You can contribute:
- Lump sums at any time
- Regular monthly amounts
- One-off payments before the tax year ends
Unused Allowance
Unlike the Help to Buy ISA, unused LISA allowance doesn't carry over. If you don't use your £4,000 in a tax year, you lose that year's contribution opportunity permanently.
Who Can Open a Lifetime ISA?
LISA eligibility is straightforward but has strict age requirements:
- Minimum Age: 18 years old
- Maximum Age to Open: Must open before your 40th birthday
- Residency: UK resident or Crown servant (diplomat, armed forces) posted overseas
- Maximum Contribution Age: Can contribute until age 50
One LISA Per Tax Year
You can only open and contribute to one Lifetime ISA per tax year. However, you can transfer your LISA between providers to get better interest rates or investment returns.
Using Your LISA for Your First Home
The Lifetime ISA can be used to purchase your first home with the following conditions:
Property Requirements
- Maximum Price: £450,000 or less
- Location: Anywhere in the UK
- Ownership: Must be your first home (never owned property anywhere)
- Mortgage Required: Must be bought with a repayment mortgage (minimum 25%)
- Residency: Must intend to live in the property as your main residence
Joint Purchases
If buying with a partner or friend:
- Each buyer can use their own LISA
- Combined bonuses can be used for the same purchase
- Maximum property price still £450,000
- All buyers must be first-time buyers
The Home Buying Process
- Find a property within the £450,000 limit
- Your solicitor/conveyancer handles the LISA withdrawal
- Funds transferred directly for the property purchase
- Must be completed within 90 days of withdrawal (can be extended if needed)
Using LISA for Retirement Savings
Beyond buying a home, the LISA is a powerful retirement savings tool:
Accessing Your LISA at 60
Once you reach 60, you can withdraw your entire LISA balance completely tax-free for any purpose:
- No restrictions on how you use the money
- Completely tax-free withdrawals
- Can be used alongside your pension
- No requirement to buy an annuity
LISA vs Pension
Consider these factors when deciding between LISA and pension:
| Feature | Lifetime ISA | Pension |
|---|---|---|
| Government Top-Up | 25% bonus | Tax relief at marginal rate (20%/40%/45%) |
| Employer Contributions | No | Yes (usually) |
| Access Age | 60 | 55 (rising to 57-58) |
| Tax on Withdrawals | Tax-free | 25% tax-free, rest taxed as income |
| Affects Benefits | Yes (counts as savings) | Generally protected |
| Inheritance Tax | May be taxable | Usually not taxable |
Withdrawal Rules & Penalties
Understanding withdrawal rules is crucial for LISA success:
Penalty-Free Withdrawals
You can withdraw without penalty for:
- First home purchase (up to £450,000)
- Terminal illness (with less than 12 months to live)
- After age 60 (for any purpose)
The 25% Withdrawal Penalty
If you withdraw for any other reason, you'll pay a 25% penalty. Here's how it works:
If you withdraw for an unauthorized purpose:
25% penalty on £1,000 = £250 penalty
You receive: £750
Net result: You lose £50 of your original £800 contribution (6.25% loss)
Lifetime ISA vs Help to Buy ISA
If you have a Help to Buy ISA, you may wonder whether to switch to a LISA:
| Feature | Lifetime ISA | Help to Buy ISA |
|---|---|---|
| Bonus Rate | 25% | 25% |
| Annual Limit | £4,000/year | £2,400/year (£3,400 first month) |
| Maximum Bonus | £33,000 (over lifetime) | £3,000 (capped) |
| Bonus Timing | Monthly | At property purchase |
| Property Price Limit | £450,000 (anywhere UK) | £250,000 (£450,000 London only) |
| Minimum Age | 18-39 to open | 16+ |
| Retirement Option | Yes (age 60+) | No |
| Penalty for Non-Home Use | 25% (lose bonus + some savings) | Just lose bonus, keep interest |
| Availability | Open now | Closed to new savers |
Can I Have Both?
Yes, you can have both a Help to Buy ISA and a Lifetime ISA, but:
- You can only use the bonus from one for your first home purchase
- You can transfer Help to Buy ISA funds to your LISA
- Transfers count toward your £4,000 annual LISA limit
Lifetime ISA & Tax-Free Savings Accounts Around the World
The UK Lifetime ISA offers a unique combination of first-home and retirement savings incentives. Other countries have comparable tax-advantaged savings vehicles, though the structures, limits, and bonus mechanisms differ considerably.
| Country | Account Type | Annual Limit | Government Bonus | Key Features |
|---|---|---|---|---|
| United Kingdom | Lifetime ISA (LISA) | £4,000/year | 25% government bonus (up to £1,000/year; max £33,000 lifetime) | Ages 18–39 to open. Use for first home (up to £450K property) or retirement after age 60. 25% penalty on unauthorised withdrawals. Lifetime ISA calculator available. See also ISA calculator. |
| United Kingdom | Help to Buy ISA (closed to new applicants Dec 2019) | £200/month (£1,200 in first month) | 25% government bonus (up to £3,000 per saver) | Now closed. Only claimable at completion of property purchase. Lower property limit (£250K nationally; £450K in London). Existing savers can continue until Nov 2029. |
| Canada | First Home Savings Account (FHSA) | C$8,000/year (C$40,000 lifetime) | No direct bonus — contributions tax-deductible; growth & withdrawals for first home tax-free | Launched April 2023. Must be first-time buyer. Combines RRSP + TFSA style benefits for home purchase. FHSA calculator available. |
| United States | Roth IRA (retirement, not home-specific) | $7,000/year (2025; $8,000 if 50+) | No government bonus — post-tax contributions; growth & qualified withdrawals tax-free | Up to $10,000 lifetime Roth IRA withdrawals for first home (penalty-free after 5 years). No income cap for contributions below phase-out. IRA calculator available. |
| Australia | First Home Super Saver Scheme (FHSS) | A$15,000/year voluntary super contributions (A$50,000 total) | No direct bonus — concessional (pre-tax) contributions taxed at 15% vs marginal rate; ‘deemed earnings’ applied | Uses existing superannuation structure. Must apply for FHSS determination before signing property contract. Released funds used for first home deposit. |
| France | Plan Épargne Logement (PEL) / CEL | PEL: €61,200 max balance; CEL: €15,300 | State premium on PEL up to €1,525 (only if used for mortgage) | Savings earn guaranteed interest rate (currently 2.25% gross). PEL proceeds can be converted to discounted mortgage. Regulated under French banking law. |
| Germany | Wohnungsbauprämie (Home Savings Bonus) | €700 single / €1,400 couple taxable income under €35K/€70K | 8.8% state bonus on qualifying savings | Must use Bausparkasse (building society) savings plan. Savings must be used for housing. Income limits apply. Very traditional German savings product. |
Tax-free savings account rules, contribution limits, and bonus structures change frequently. Verify current rules with official government sources or a qualified financial adviser in your country.
Frequently Asked Questions
The maximum Lifetime ISA bonus is £33,000. This is achieved by contributing the maximum £4,000 every year from age 18 to age 50 (32 years of contributions). Each year you receive a £1,000 bonus (£4,000 × 25%).
No, you must open a Lifetime ISA before your 40th birthday. Once you turn 40, you can no longer open a new LISA account. However, if you already have one opened before 40, you can continue contributing until age 50.
If you withdraw for any purpose other than buying your first home (up to £450,000), terminal illness, or after age 60, you'll pay a 25% withdrawal charge. This means you lose the government bonus plus an additional 6.25% of your own contribution. For example, if you withdraw £1,000, you'll pay £250 in charges and receive only £750.
No, there are restrictions. The property must cost £450,000 or less and be located anywhere in the UK. It must be your first home, and you must buy it with a repayment mortgage of at least 25% of the property value. Buy-to-let properties are not eligible.
Yes! If you're both first-time buyers, you can each use your own Lifetime ISA toward the same property purchase. This means you could combine two bonuses, potentially receiving up to £2,000 per year in government contributions between you. The property price limit remains £450,000 regardless of how many LISAs are used.
Yes. The £4,000 LISA annual limit counts toward your overall ISA allowance (£20,000 for 2024-25). This means if you contribute the maximum £4,000 to your LISA, you can contribute up to £16,000 to other ISAs (Cash ISA, Stocks & Shares ISA, Innovative Finance ISA) in the same tax year.
The government bonus is paid monthly based on your contributions that month. This is a key advantage over the Help to Buy ISA where the bonus is only paid at property purchase. Monthly payments mean your bonus starts earning interest or investment returns immediately.
Yes, you can transfer funds from a Help to Buy ISA to a Lifetime ISA. However, the transferred amount counts toward your annual £4,000 LISA contribution limit for that tax year. For example, if you transfer £2,000, you can only add £2,000 more in new contributions that year.
After age 50, you can no longer contribute to your LISA or receive government bonuses. However, your account remains open, and your savings continue to grow tax-free through interest or investment returns. You can only access the funds without penalty for retirement purposes once you reach age 60.
This depends on your timeline and risk tolerance. A Cash LISA is safer with guaranteed returns, suitable for short-term saving (buying within 5 years). A Stocks & Shares LISA has higher potential returns but with investment risk, better for long-term retirement saving (10+ years). For first home purchases soon, Cash LISA is usually recommended to protect your deposit.
If you've ever owned a property anywhere in the world (including inherited property or property owned abroad), you cannot use a LISA for a home purchase without penalty. However, you can still open a LISA before age 40 and use it for retirement savings from age 60. If you owned property but didn't buy it (e.g., inherited), you may still qualify as a first-time buyer — check with your solicitor.
Interest rates vary by provider and change over time. As of 2024-25, Cash LISA rates typically range from 3% to 5% AER. Remember, you also earn the 25% government bonus, making the effective return much higher. Shop around regularly as rates change, and consider transferring your LISA to a better-paying provider.
Yes, many providers allow you to open a LISA with a minimal deposit (often £1 or even £0). This is a smart strategy if you're approaching age 40 — open the account now to secure your eligibility, then contribute more when you're ready. You can only contribute up to £4,000 per tax year, but opening early preserves your option to use the LISA later.
If your purchase falls through, your solicitor will return the LISA funds to your account. You won't lose the money or face penalties. You can then use the funds for another eligible property purchase or keep them in your LISA for retirement. The returned funds don't count as new contributions, so you can still add up to £4,000 that tax year.
For retirement, pensions often have advantages: employer contributions, tax relief at your marginal rate (better than 25% for higher earners), and no impact on benefits. However, LISAs offer tax-free withdrawals and flexibility. Many people use both: maximise employer pension match first, then consider LISA for additional retirement savings or first home purchase. For first homes, LISA is usually better than pension for basic rate taxpayers.
Trusted Resources
For official information about the Lifetime ISA:
- GOV.UK – Lifetime ISA – Official government guidance and rules
- MoneyHelper – Lifetime ISA – Free government-backed guidance
- HM Treasury – Lifetime ISA Collection – Official scheme documentation
- ISA Calculator – Compare annual ISA allowances
- Retirement Calculator – Plan your pension alongside LISA
About This Calculator
The CalculatorZone Lifetime ISA Calculator is built and maintained by our UK savings and financial planning content team. Last reviewed February 2026.
Sources & Methodology: This calculator uses official Lifetime ISA rules published by HM Treasury and guidance from MoneyHelper. Bonus calculations are based on the current 25% LISA bonus rate. Growth projections use estimated annual returns for illustration only.
Expertise: Content is reviewed for accuracy against current HMRC and HM Treasury LISA regulations. For personal savings advice, always consult a regulated financial adviser authorised by the Financial Conduct Authority (FCA).
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