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Lifetime ISA calculator
What the 25% government bonus is worth by your buying date (or at 60), what the same money would do in an ordinary ISA, and the real cost of taking it out early.
Using a cash LISA? Set growth to your account’s interest rate (or 0 to ignore interest). For money you need within about five years, cash avoids the risk of a market dip right before you buy.
In 5 years
£16,599
£12,000 put in · £3,000 of free bonus · £1,599 of growth
Guidance, not advice. Growth is not guaranteed, and the bonus actually lands 4 to 9 weeks after each contribution.
The early-withdrawal trap
Take money out for anything other than a first home under £450,000, age 60, or terminal illness, and the government claws back 25% of the whole withdrawal, not just the bonus:
You pay in
£4,000
+25% bonus
£5,000
25% charge
−£1,250
You get back
£3,750
£3,750 back on £4,000 of your own money is a 6.25% loss, before any growth. Only use a LISA for money you are sure is for a first home or for after 60.
Common questions
- Is a Lifetime ISA better than a regular ISA for a house deposit?
- For a first home up to £450,000, almost always. The government adds 25% to everything you pay in (up to £1,000 a year on the £4,000 cap), which no ordinary ISA can match. The trade-off is flexibility: take the money out for anything else before 60 and the 25% withdrawal charge means you get back less than you put in.
- Should I use a Lifetime ISA or a pension for retirement?
- If your employer matches pension contributions, the pension wins: a match is an instant 100% return before tax relief, against the LISA's 25%. The LISA can make sense for the self-employed, for basic-rate taxpayers who have maxed the match, or as a tax-free top-up, since LISA withdrawals after 60 are entirely tax-free while most pension income is taxable.
- What if my first home costs more than £450,000?
- Then you cannot use the LISA towards it without paying the 25% withdrawal charge, which eats into your own contributions, not just the bonus. The cap is a cliff edge, not a taper, and it has not risen since 2017, which bites hardest in London where the average first-time buyer now pays close to it. If you expect to bust the cap, an ordinary ISA keeps your options open.
- Cash LISA or stocks and shares LISA?
- It depends on your horizon. Buying within roughly five years, cash protects you from a market dip just before you need the deposit. Ten years or more, especially in retirement mode to age 60, stocks have historically beaten cash comfortably, though with no guarantee. Some savers switch from stocks to cash as the purchase gets close.
- Can a couple use two Lifetime ISAs on one house?
- Yes. The £4,000 allowance and £1,000 bonus are per person, so a couple buying together can each contribute and each collect the bonus, up to £2,000 of free money a year between them. Both must be first-time buyers to use both LISAs penalty-free on the same purchase, and the £450,000 property cap applies to the home, not per person.
- When is the LISA bonus actually paid?
- Monthly. Your provider claims it from HMRC for everything you paid in during each claim period (the 6th of one month to the 5th of the next), and it typically lands in your account 4 to 9 weeks after the contribution. Once it arrives it is invested and grows just like your own money.
Comparing against a workplace pension? The pension contributions calculator shows what the employer match and tax relief are worth. Working out the rest of the deposit, the savings goal planner turns the target into a monthly number, the mortgage affordability calculator shows what you could borrow, and the stamp duty calculator covers the tax on the purchase itself.