Lifetime ISA (LISA) Bonus & Growth Calculator (2026)
Calculate your 25% government bonus (£1,000/yr), compound investment growth for a first home deposit or retirement, and model the 25% unauthorized withdrawal penalty.
United Kingdom Calculator
Adjust Your Inputs
Move the sliders or type exact numbers. Results update instantly.
Instant Estimate
Your Results
Total Projected LISA Fund
£29,440
Based on your selected lifetime isa calculator assumptions. Try different sliders to compare scenarios.
Total Free Government Bonus Added (25%)
£5,000
Total Personal Deposits
£20,000
Compound Investment Growth
£4,440
HMRC Penalty if Withdrawn Non-Qualifying (25%)
£7,360
These calculations are financial projections and planning estimates, not tax, legal or licensed financial advice. HMRC 2025/2026 statutory rates, NI thresholds, and local council rates apply.
How to Use the Lifetime ISA Calculator
Enter annual deposit
Input your yearly LISA contribution (maximum £4,000 per tax year).
Enter current age & saving horizon
Input your age (must be 18–39 to open) and planned years of saving (eligible for bonuses until age 50).
Select expected growth rate
Choose an assumed return (e.g. 3.5% for Cash LISA or 5.5%–7% for Stocks & Shares LISA).
Review 25% HMRC bonus, total pot & penalty
See total government bonuses, compound returns, and the 25% unauthorized withdrawal penalty.
Formula & Calculation Methodology
Government Bonus = Annual Deposit × 25% (Max £1,000/yr) | Unauthorized Penalty = Total Pot × 25%This calculator uses standard United Kingdom financial formulas, IRS thresholds, and amortization schedules. All results compute instantly in your browser with zero data stored or transmitted.
Calculation Examples & Scenarios
Maxing £4,000/yr for 5 Years for a First Home
£4,000/year deposited from age 24 to 29 at 5.5% annual investment return.
2 First-Time Buyers Combining LISAs
Two partners both maxing LISAs for 3 years (£8,000 combined/yr).
Key Benefits
- Accurately calculates the statutory 25% HMRC bonus (up to £1,000 free per year)
- Enforces the age 50 contribution cutoff and models compound investment growth
- Calculates the exact 25% penalty on unauthorized non-qualifying withdrawals
Common Use Cases
- First-time buyers aged 18 to 39 saving a deposit for a property priced up to £450,000
- Couples calculating how much combined free government bonus they can generate
- Self-employed individuals building a tax-free retirement pot alongside or instead of a personal pension
How the Lifetime ISA 25% Government Bonus Works
The UK Government adds a 25% bonus to your Lifetime ISA savings up to £4,000 each tax year—delivering up to £1,000 in free state cash annually. Bonuses are paid monthly directly into your account and can be invested immediately in cash interest or stocks and shares.
The £450,000 Property Price Cap & 25% Withdrawal Penalty Warning
You can use your Lifetime ISA without penalty only if you are buying your first home valued at £450,000 or under with a mortgage, or after reaching age 60. If you purchase a property above £450,000 or withdraw cash for other purposes, HMRC applies a 25% penalty to the entire balance, which claws back the full bonus plus approximately 6.25% of your personal savings.
Frequently Asked Questions
The UK Government adds a 25% tax-free bonus to whatever you deposit into a Lifetime ISA, up to a maximum contribution of £4,000 each tax year. That means depositing the maximum £4,000 nets an instant £1,000 free bonus from HMRC every year.
You must be a UK resident aged 18 or over, but under 40, to open a Lifetime ISA. Once open, you can continue depositing and claiming the 25% government bonus until your 50th birthday.
You can use your Lifetime ISA without penalty to buy your first home priced at up to £450,000 anywhere in the UK. The purchase must be made with a mortgage, and you must intend to live in the property as your only or main residence.
If you withdraw funds from a LISA for anything other than buying your first qualifying home (under £450k) or after reaching age 60, HMRC deducts a 25% penalty from the total withdrawn amount. Because the penalty applies to both your deposits AND the bonus, you lose approximately 6.25% of your original savings!
Yes! If you are buying a first property together with a partner or friend and you are both first-time buyers with individual LISAs, you can both use your LISA funds and combined government bonuses toward the deposit, provided the property total purchase price is £450,000 or less.
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Related United Kingdom Guides
Lifetime ISA (LISA) 2026 Rules: How the 25% Government Bonus Works
Complete guide to the UK Lifetime ISA: eligibility between ages 18 and 39, claiming the £1,000 annual bonus on £4,000 deposits, and buying your first home.
Lifetime ISA £450k Property Cap: Beware the 25% Withdrawal Penalty
Understand the statutory £450,000 UK property ceiling for Lifetime ISAs and why buying a home above £450k triggers a 25% HMRC penalty that wipes out your bonus and savings.