UK Lifetime ISA Calculator 2026/27 (LISA Bonus & Growth)
Calculate your UK Lifetime ISA (LISA) government bonus, projected growth until age 50 and 60, first home deposit timeline, and the 25% penalty cost of unauthorised withdrawals. Uses 2026/27 rules (£4,000/year cap, £1,000/year max bonus, £450,000 property price cap) — all runs in your browser, no data sent anywhere.
| Age | Contribution | Bonus | Growth | Balance |
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| Scenario | After 10 years |
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How the Lifetime ISA Works in 2026/27
The Lifetime ISA (LISA) is a UK savings account for adults aged 18 to 49 that pays a 25% government bonus on contributions, up to £1,000 per tax year. You can pay in up to £4,000 each tax year (this counts toward your overall £20,000 ISA allowance), and the bonus is paid directly into your LISA monthly by HMRC. Contributions stop at age 50, but your pot continues to grow until withdrawal. Funds can be used penalty-free for a first home under £450,000 or for retirement from age 60.
LISA Key Limits 2026/27
Age to open: 18–39
Age to contribute: 18–49 (contributions stop at 50th birthday)
Annual contribution cap: £4,000
Government bonus: 25% = up to £1,000/year
First home price cap: £450,000 (UK-wide)
Retirement access age: 60
Unauthorised withdrawal penalty: 25% of the amount withdrawn (effective 6.25% net loss)
Example: £4,000 contribution, 25% bonus
- You pay in: £4,000
- Government adds: £1,000 (25%)
- Total in LISA: £5,000 before any investment growth
- Bonus is paid monthly, typically 4–9 weeks after contribution
First Home Purchase With a LISA
To use LISA funds for a first home, you must be a first-time buyer, the property must cost £450,000 or less, you must buy with a mortgage, and the LISA must have been open for at least 12 months before completion. Your solicitor requests the funds directly from the LISA provider — you cannot withdraw the money yourself and then pay for the house. Most buyers use the LISA toward their deposit (typically 10%–20% of the price), meaning a £300,000 home with a 20% deposit needs £60,000 saved. Pairing maximum LISA contributions (£4,000/year + £1,000 bonus) with a partner's LISA can accelerate this timeline dramatically.
Example: £300,000 first home, 20% deposit needed
- Deposit target: £60,000
- Max LISA contribution: £4,000/year + £1,000 bonus = £5,000/year
- Assuming 5% growth: deposit target hit in roughly 10 years from a £0 start
- With a partner's LISA also maxed: roughly 5 years
LISA Withdrawal Penalty vs Cash ISA vs Stocks & Shares ISA
If you withdraw for any reason other than a qualifying first home, retirement at 60, or terminal illness, HMRC charges a 25% penalty on the amount withdrawn. Because the bonus was 25% on the way in but the penalty is 25% on the way out, the net effect is a 6.25% loss on your original contribution — not just the loss of the bonus. A £5,000 LISA balance (from £4,000 of your money plus £1,000 bonus) would return just £3,750 if withdrawn early. For savers who are uncertain whether they will buy a home or leave it until 60, a Stocks & Shares ISA or Cash ISA may offer more flexibility — no bonus, but no penalty either. The LISA's 25% bonus almost always beats a Cash ISA for house deposits if you definitely plan to buy, but the penalty risk matters for anyone whose plans could change.
Last updated: April 2026. Based on HMRC Lifetime ISA rules for the 2026/27 tax year. Always confirm current rules on GOV.UK before making financial decisions.
Frequently Asked Questions
How much is the Lifetime ISA government bonus in 2026/27?
The government adds a 25% bonus on every pound you contribute to a Lifetime ISA, up to a maximum of £1,000 per tax year. That means if you pay in the full £4,000 annual limit, HMRC adds £1,000, bringing your total contribution for the year to £5,000 before any investment growth. The bonus is paid into your LISA automatically each month, usually 4 to 9 weeks after each contribution is made.
Who is eligible to open and contribute to a Lifetime ISA?
You must be a UK resident aged 18 to 39 to open a Lifetime ISA. Once opened, you can keep contributing (and receiving the bonus) until your 50th birthday. After age 50 you cannot pay in more money, but the existing pot continues to grow until you either use it for a first home or withdraw it penalty-free from age 60. Crown servants posted overseas are also eligible even if not UK resident.
What happens if I withdraw from a Lifetime ISA early?
If you withdraw for any reason other than buying a qualifying first home, reaching age 60, or being diagnosed with a terminal illness, HMRC charges a 25% penalty on the amount withdrawn. Because the bonus was 25% on the way in and the penalty is 25% on the way out, the net effect is a 6.25% loss on your original contribution — not just the loss of the bonus. For example, £4,000 contributed becomes £5,000 with the bonus, but an early withdrawal returns only £3,750.
Can I use a Lifetime ISA to buy any property?
No. To use LISA funds penalty-free for a first home, the property must cost £450,000 or less anywhere in the UK, you must be a first-time buyer (never owned property anywhere in the world), you must buy with a mortgage, and the LISA must have been open for at least 12 months. Your solicitor will request the funds directly from the LISA provider at completion — you cannot withdraw the money yourself.
Is a Lifetime ISA better than a pension for retirement?
It depends on your tax band. A pension typically offers better tax relief for higher-rate taxpayers (40% or 45% relief vs LISA 25% bonus). But LISA withdrawals from age 60 are completely tax-free, while pension withdrawals are taxed as income beyond the 25% tax-free lump sum. For basic-rate taxpayers and self-employed workers without employer pension matching, the LISA can be competitive. Many savers use both — pension for employer match and tax relief, LISA for tax-free access at 60.
Does the LISA allowance count toward my £20,000 ISA allowance?
Yes. The £4,000 you can contribute to a Lifetime ISA each tax year counts toward your overall £20,000 annual ISA allowance. That leaves £16,000 to split across Cash ISAs, Stocks & Shares ISAs, or Innovative Finance ISAs. The 25% government bonus does not count toward the £20,000 limit — only your own contributions do.