Lifetime ISA Calculator — Calculate Your Government Bonus — UK 2026
Calculate how much your Lifetime ISA could grow with the 25% government bonus. Plan for your first home purchase or retirement with LISA in 2026.
The Lifetime ISA is one of the most generous savings vehicles available in the UK for people aged 18-39. You can save up to £4000 per year and the government adds a 25% bonus meaning up to £1000 of free money annually. The LISA can be used toward your first home purchase up to £450000 or accessed penalty-free from age 60 for retirement. With the power of the government bonus plus investment growth a LISA can significantly boost your savings for these two major life goals.
How much can I save in a Lifetime ISA?
You can save up to £4000 per year in a LISA and receive a £1000 government bonus on top. If you open a LISA at 18 and contribute the maximum until age 50 you would have contributed £128000 received £32000 in government bonuses and potentially earned significant investment returns on top. The LISA counts toward your overall £20000 annual ISA allowance.
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ISA Calculator UK
Understanding Your Investment Returns
This calculator projects your returns using compound interest, where your earnings generate their own earnings over time. The power of compounding means that even small regular investments can grow into substantial wealth over long periods. For example, investing just Rs 5,000 per month at 12% expected returns for 25 years can grow to over Rs 1 crore — of which only Rs 15 lakh is your own money and Rs 85 lakh is compounding returns. The key factors that determine your final corpus are: the amount invested, the rate of return, the duration of investment, and the frequency of compounding.
Important Considerations
Past returns do not guarantee future performance, especially for market-linked instruments like mutual funds and equities. The returns shown are estimates based on the rate you enter. Equity investments carry market risk but have historically delivered 12-15% CAGR over 15+ year periods in India. Fixed income options like PPF (7.1%) and FD (6-7.5%) offer lower but more predictable returns. Diversifying across asset classes — equity, debt, gold, and real estate — reduces overall portfolio risk while optimizing returns for your risk tolerance.
Key Information
| Parameter | Details |
|---|---|
| Annual Contribution Limit | £4000 |
| Government Bonus | 25% (up to £1000/year) |
| First Home Price Limit | £450000 |
| Early Withdrawal Penalty | 25% of total withdrawal |
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Use Calculator NowFrequently Asked Questions
How much can I save in a Lifetime ISA?
You can save up to £4000 per year in a LISA and receive a £1000 government bonus on top. If you open a LISA at 18 and contribute the maximum until age 50 you would have contributed £128000 received £32000 in government bonuses and potentially earned significant investment returns on top. The LISA counts toward your overall £20000 annual ISA allowance.
Can I use a LISA and Help to Buy ISA together?
The Help to Buy ISA closed to new accounts in November 2019 but if you have both you can only use the government bonus from one of them for a property purchase. You can still use the savings from both but only claim the bonus from your LISA or Help to Buy not both. Most advisors recommend choosing the LISA bonus as it is more generous.
What happens if I withdraw early from a LISA?
Withdrawing from a LISA for any purpose other than buying your first home or after age 60 incurs a 25% penalty on the total withdrawal amount. This effectively means you lose the government bonus plus an additional amount. For example withdrawing £1000 would cost you £250 in penalties leaving you with £750 which is less than your original £800 contribution.
What is compound interest and why does it matter?
Compound interest means you earn interest on your interest, not just your principal. Over long periods, this creates exponential growth — even small regular investments can grow into substantial wealth over 15-25 years.
Should I invest regularly or as a lump sum?
Regular investing (dollar-cost averaging) smooths out market volatility by buying at various price points. Lump sum investing works better if markets are undervalued. For most people, regular monthly investing is simpler and more disciplined.
How much should I invest monthly to reach my goal?
The amount depends on your target, timeline, and expected returns. Use this calculator to model different scenarios. The key factors are starting early, investing consistently, and reinvesting returns.
Are investment returns taxable?
Tax treatment varies by investment type and country. Capital gains, dividends, and interest income may be taxed differently. Consult a tax professional for advice specific to your situation and jurisdiction.
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Last updated: March 2026