How the Lifetime ISA calculator works

Each year you pay in up to £4,000, the government adds a 25% bonus (up to £1,000), and the account grows at the rate you enter, after charges. Payments stop at 50, as the rules require, but the account keeps growing. For a cash Lifetime ISA, enter the interest rate as the growth rate and charges as 0. The calculator also shows what you'd get back if you withdrew everything for a reason other than a first home, reaching 60 or terminal illness, after the 25% withdrawal charge.

Worked examples

Saving for	You pay in	Bonus	Value	If withdrawn early
A first home in 5 years (age 25, £4,000 a year, 4% growth, 0.3% charges)	£20,000	£5,000	£27,906	£20,929
Retirement at 60 (age 25, £4,000 a year until 50, 5% growth, 0.3% charges)	£100,000	£25,000	£378,155	Free to withdraw at 60

The 25% charge applies to the whole balance, including the bonus, so it takes back the bonus and 6.25% of your own money. With no growth, £20,000 paid in over five years becomes £25,000 with the bonus, but only £18,750 if withdrawn for another reason. In the first example, growth of 4% a year happens to cover that loss (£20,929 against £20,000 paid in), but growth isn't guaranteed, and investments can fall as well as rise.

The rules that decide what you can do

Opening: you must be 18 or over and under 40, and make your first payment before 40.
Paying in: up to £4,000 a year until you're 50, counting towards your £20,000 ISA allowance.
First home: free to withdraw for a first home costing £450,000 or less, bought with a mortgage, at least 12 months after your first payment, with the money paid to your conveyancer.
From 60: withdraw any amount for any reason, tax-free.
Anything else: a 25% charge on the amount you take out.

Is the Lifetime ISA being replaced?

The government consulted in summer 2026 on a new First Time Buyer ISA, to be offered in place of the Lifetime ISA once it launches. There's no launch date yet. HM Treasury's consultation says people who already have a Lifetime ISA will be able to keep saving into it under the existing rules indefinitely, and until the new product launches you can still open one. Our Lifetime ISA guideexplains the proposals and every rule in detail, and the ISA allowance checker shows how much of this year's £4,000 you've used.

Lifetime ISA or pension for retirement?

For retirement, compare it with a pension before choosing. A pension adds tax relief at your income tax rate, workplace pensions also get employer contributions, and you can usually access a pension from 55 (57 from April 2028). Lifetime ISA withdrawals from 60 are tax-free, while most pension withdrawals are taxed as income. Thepension tax relief calculator shows what a pension contribution would really cost you.

Sources

This calculator gives illustrations based on the figures you enter and the tax rules shown. It isn't personal financial advice. Our guides are general information and education, not personal financial advice. If you are unsure whether an investment is right for you, speak to a regulated financial adviser.

Lifetime ISA calculator