lifetime isa calculator

What is a Lifetime ISA?

A Lifetime ISA (LISA) is a UK savings and investment account designed to help you either buy your first home or save for later life. You can open one if you are aged 18 to 39, contribute up to £4,000 per tax year, and receive a 25% government bonus on what you put in.

In plain language: if you contribute the full £4,000, the government adds £1,000. That means £5,000 goes into your account before investment growth.

How this lifetime ISA calculator works

This tool provides an estimate, not a guarantee. It projects year-by-year growth based on the values you enter:

• Current age and target age to set the projection period.
• Current balance as your starting point.
• Annual contribution (capped at £4,000 per year by LISA rules).
• Government bonus at 25% of annual contribution (up to £1,000/year).
• Annual growth rate to model investment returns.
• Inflation to show an inflation-adjusted value.
• Withdrawal scenario to include a potential 25% charge when relevant.

Core assumptions

• Contributions and bonus are added once per year during the projection.
• Contributions and bonus stop after age 50.
• Growth is compounded annually.
• A non-qualifying withdrawal applies a 25% charge to the pot at the target age.

Important LISA rules to remember

• You can contribute until age 50.
• You can keep the account open and invested after age 50.
• Qualifying withdrawals are generally for a first-home purchase or from age 60.
• Non-qualifying withdrawals usually face a 25% charge.

Why the 25% withdrawal charge matters

Many savers assume a 25% charge simply removes the bonus. In practice, it can reduce your own contributions too. Example: contribute £100, receive a £25 bonus, total £125. A 25% charge on £125 removes £31.25, leaving £93.75.

So the effective loss vs your original contribution is £6.25 (before investment performance). This is why planning your withdrawal route is so important.

How to use this calculator well

1) Test multiple return assumptions

Try conservative, moderate, and optimistic growth rates (for example 3%, 5%, and 7%) to understand a range of outcomes.

2) Compare contribution levels

Even if you cannot invest the full £4,000 each year, regular contributions still unlock meaningful bonus value over time.

3) Include inflation

A nominal balance can look large many years into the future. Inflation-adjusted value helps you see what that money might be worth in today’s terms.

4) Check timing around age 50 and age 60

These age thresholds are central to LISA planning. The calculator highlights the impact of stopping contributions at 50 and potential access at 60.

Common planning mistakes

• Ignoring the annual contribution cap and overestimating bonus amounts.
• Assuming short-term market returns will be smooth year to year.
• Treating inflation as irrelevant for long-term goals.
• Overlooking the withdrawal charge on non-qualifying withdrawals.

FAQ

Can I use this for a cash LISA and a stocks & shares LISA?

Yes. The structure is similar for bonus rules. The return input lets you model lower rates (more cash-like) or higher long-term rates (investment-like).

Does this replace financial advice?

No. This is an educational calculator. For personalized recommendations, use a regulated UK financial adviser.

What if I already have a LISA and I’m over 40?

You can continue contributing until age 50 if your account is already open and eligible. This calculator supports projections for that situation.

Final thought

A Lifetime ISA can be a powerful wealth-building tool because the government bonus boosts every pound you save. Combine that with disciplined contributions and long-term compounding, and small yearly actions can make a significant difference.