Lifetime ISA (LISA) Calculator — 25% Government Bonus
The Lifetime ISA offers something no other savings account does: a 25% government bonus on contributions up to £4,000 per year. That's £1,000 of free money annually, on top of any investment returns. If you contribute the maximum £333/month and invest at 6% returns, your LISA could grow to approximately £180,000 over 25 years — with roughly £30,000 of that being pure government bonus. The LISA can be used for your first home purchase (up to £450,000 property value) or accessed penalty-free at 60 for retirement. The catch: withdrawing for any other reason incurs a 25% penalty, which actually costs you more than the bonus itself. This calculator models the growth with the bonus already factored into your effective contribution.
Illustrative estimate only — not a guarantee
~£230,767 after 25 years
£99,900 contributed + £130,867 interest
Based on a hypothetical constant return. Actual returns will vary.
By the CompoundWise Team · Updated April 2026
UK-based financial education · Not financial advice
Final Balance
£230,767
After 25 years
You Put In
£99,900
Your own money
Interest Earned
£130,867
Earned passively
You could reach £230,767 — investing tax-free can help you get there
To reach £230,767, most UK investors use a Stocks & Shares ISA to invest £333/month tax-free.
Returns depend on the underlying investments and are not guaranteed.
Your £333/month fits within the £20,000 ISA allowance
All growth inside an ISA is tax-free. Start from as little as £1.
Capital at risk when investing
Thousands of UK investors use this calculator monthlyGrowth Over Time
Quick Scenarios
Your Personalised Insights
- Year 22: your interest overtakes your contributions. From here, compounding does the heavy lifting.
- Your money earns ~£14/day in interest — that's £130,867 earned while you sleep.
- Saving just £50 more per month would add £34,650 to your final balance — that's £15,000 invested for £34,650 extra.
- 5 more years would add £103,737 — nearly 45% more, showing how powerful time is.
- Starting 5 years earlier would add £76,907 to your final balance. Every year you wait costs real money.Start investing now →
- Consistency beats timing — investing £333/month for 25 years matters more than picking the perfect moment to start.
- At your current plan, you reach £100k in 16 years. That's a real milestone — and it compounds from there.Start building towards it →
Affiliate disclosure: Some links below are affiliate links. We may earn a commission at no extra cost to you if you sign up. This does not influence which platforms are shown or how they are described.
Explore popular UK investment platforms
Many UK investors hold investments in a stocks & shares ISA for tax efficiency. Returns depend on the investments held within the ISA and are not guaranteed. Here are popular platforms available to UK investors.
| Platform | Min. invest | Fees | ISA | Best for |
|---|---|---|---|---|
| Trading 212 | Start from £1 | No commission | Yes | Beginner-friendly |
| Revolut | No minimum | Free plan available | Yes | All-in-one finance |
| Estateguru | Start from €50 | No investor fees | — | Property-backed lending |
Trading 212
Suited for: Beginner-friendly
Commission-free stocks & shares ISA. Clean app, no hidden charges, perfect for getting started.
Most popular choice for UK investors starting small
Revolut
Suited for: All-in-one finance
All-in-one finance app with savings vaults, stock trading, crypto, and multi-currency accounts. Great for everyday money management.
Estateguru
Suited for: Property-backed lending
European property-backed lending platform. Returns are not guaranteed and your capital is at risk. Past performance is not a reliable indicator of future results.
P2P lending is high risk. You could lose some or all of your money. Not covered by the FSCS.
Capital at risk. These are informational suggestions, not financial advice.
Invest from £1 tax-free
Capital at risk
Ready to start? Open a free ISA
Trading 212 · Start from £1 · No commission · FCA regulated
Year-by-Year LISA Growth Including the 25% Government Bonus
Contributing £333 per month (just under the £4,000 annual maximum) at 6% returns with the 25% government bonus, your LISA balance reaches approximately £5,285 after year one — £3,996 contributed, £999 in government bonus, and £290 in investment growth. By year five, you hold roughly £28,300, including approximately £5,000 in cumulative government bonuses. Year 10 brings a balance of approximately £65,700, and the annual investment return alone surpasses £3,500. By year 15, your LISA reaches roughly £116,000, and at the 25-year mark, the total hits approximately £180,000. Over the full period, the government has contributed roughly £25,000 in bonuses — free money that has been compounding alongside your own contributions for up to 25 years.
LISA Rules, Restrictions, and Withdrawal Penalties Explained
The Lifetime ISA is available to UK residents aged 18 to 39 (you can continue contributing until age 50 once opened). You can contribute up to £4,000 per year, and the 25% bonus (up to £1,000) is paid monthly, typically within four to nine weeks of each contribution. The LISA can be used for two purposes: purchasing your first home (property value up to £450,000, must be bought with a mortgage) or retirement withdrawals from age 60. Withdrawing for any other reason triggers a 25% government penalty — and crucially, this penalty is applied to the total withdrawal amount, not just the bonus. This means you lose more than the bonus you received: a £10,000 withdrawal would cost £2,500 in penalties, but only £2,000 of that was bonus money. Effectively, you lose £500 of your own contributions. For this reason, only use a LISA if you are confident about buying a first home or holding until age 60.
How to Open and Maximise Your Lifetime ISA
Open a LISA before your 40th birthday — even with a £1 contribution, this locks in your eligibility to contribute until age 50. Choose between a cash LISA (for house deposits within one to five years) or a stocks and shares LISA (for longer-term goals or retirement). For house deposits needed within five years, a cash LISA earning 4% to 5% is more appropriate as it avoids equity volatility. For retirement or longer-term goals, a stocks and shares LISA with a global equity fund offers superior growth potential. Set up a monthly direct debit for £333 to max out the annual allowance. The LISA allowance sits within your overall £20,000 ISA limit, so if you contribute £4,000 to a LISA, you have £16,000 remaining for a standard stocks and shares ISA. Some popular LISA providers include AJ Bell, Hargreaves Lansdown, and Moneybox.
LISA Versus Standard ISA: Which Is Better for First-Time Buyers?
For first-time buyers purchasing a property up to £450,000, the LISA is almost always superior to a standard ISA thanks to the 25% government bonus. Over five years of maximum contributions (£4,000 per year), the bonus adds £5,000 — equivalent to an instant 25% return before any investment growth. A standard stocks and shares ISA would need to return roughly 4.5% annually just to match the LISA bonus on a cash LISA earning 0%. However, the LISA has limitations: the £450,000 property price cap excludes many London properties, and the penalty for non-qualifying withdrawals effectively locks your money away. If you are unsure whether you will buy a first home, a standard ISA offers full flexibility with no penalties. A practical compromise: contribute £4,000 per year to a LISA for the bonus, and any additional savings into a standard ISA for flexibility.
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Common questions
Can I use a LISA bonus towards my house deposit?
What happens if I withdraw from a LISA early?
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