What is a Lifetime ISA (LISA)?

A Lifetime ISA is a tax-advantaged savings account available to UK residents aged 18-39. You can contribute up to £4,000 per year and the government adds a 25% bonus (up to £1,000/year). The money can be used penalty-free to buy your first home (worth up to £450,000) or withdrawn from age 60 as retirement income. All growth is tax-free.

What is the 25% withdrawal penalty?

If you withdraw money for any reason other than buying your first home or retirement (after 60), you face a 25% government charge on the full amount withdrawn. This charge claws back the government bonus and an extra 6.25% of your own contributions. For example: £100 in + £25 bonus = £125. Withdraw this early and the 25% charge = £31.25, leaving you with £93.75 (you've lost £6.25 of your own money).

Can I use a LISA to buy a home?

Yes, you can use your LISA to buy your first home as long as: (1) the property costs £450,000 or less, (2) you use a mortgage (not a cash purchase), (3) the LISA has been open for at least 12 months, and (4) you use a conveyancer or solicitor. For a joint purchase, both parties can each use their own LISA.

Can I have a LISA and a Help to Buy ISA?

You can have both, but you can only use the government bonus from one of them to buy your first home. Since the Help to Buy ISA scheme is closed to new applicants (from November 2019), most new savers should focus on the LISA. The LISA generally offers a better deal due to the higher annual contribution limit (£4,000 vs £200/month) and the higher property price limit.

Does the LISA count towards my ISA allowance?

Yes, the £4,000 LISA limit counts as part of your overall £20,000 annual ISA allowance. So if you contribute £4,000 to a LISA, you can put up to £16,000 in other ISA types in the same tax year.

Savings & Investments

Lifetime ISA Calculator

See how the 25% government bonus supercharges your savings for a first home or retirement. Up to £1,000 free money per year.

Updated April 2026

Your details

Purpose

Penalty-free use on first home up to £450,000

Current age

Must be 18–39 to open a Lifetime ISA

Age when buying property

Annual contribution

Maximum £4,000 per year. Bonus capped at £1,000/year.

Annual growth rate

Use 0% for a Cash LISA; 5-7% for a Stocks & Shares LISA

Your results

£4,000/year LISA, Buying a Home at Age 30

Final LISA value

£29,010

Government bonus

£5,000

Your contributions: £20,000
Investment growth: £4,010
Final LISA value: £29,010

Breakdown

Your contributions: £20,000 over 5 years
Government bonus (25%): +£5,000
Investment growth at 5%: +£4,010
Final LISA value at age 30: £29,010

Year-by-year breakdown

Age	Contribution	Bonus	Growth	Value
26	£4,000	+£1,000	+£250	£5,250
27	£4,000	+£1,000	+£513	£10,763
28	£4,000	+£1,000	+£788	£16,551
29	£4,000	+£1,000	+£1,078	£22,628
30	£4,000	+£1,000	+£1,381	£29,010

Related calculators

ISA Calculator Pension Calculator State Pension Calculator Savings Goal Calculator Help to Buy Equity Loan Calculator

Frequently asked questions

Sources & methodology

Built and maintained by Tim, a personal finance enthusiast (not a financial adviser). Last reviewed April 2026. Rates and thresholds come from official UK government publications.

GOV.UK: Individual Savings Accounts · ISA allowances, types and eligibility rules
HMRC: Lifetime ISA · LISA bonus, withdrawal rules and limits

Figures are estimates only. This is not financial or tax advice. For help with your specific situation, speak to HMRC or a qualified adviser.