The government adds 25% to your savings. Are you using it?
Up to £1,000 free money per year from HMRC — for your first home (up to £450,000) or retirement from 60. Open before you turn 40. See how the bonus compounds over time.
| Age | Contribution | Bonus | Pot value |
|---|---|---|---|
| 25 | £4,000 | +£1,000 | £5,250 |
| 26 | £4,000 | +£1,000 | £10,763 |
| 27 | £4,000 | +£1,000 | £16,551 |
| 28 | £4,000 | +£1,000 | £22,628 |
| 29 | £4,000 | +£1,000 | £29,010 |
| 30 | £4,000 | +£1,000 | £35,710 |
| 31 | £4,000 | +£1,000 | £42,746 |
| 32 | £4,000 | +£1,000 | £50,133 |
| 33 | £4,000 | +£1,000 | £57,889 |
| 34 | £4,000 | +£1,000 | £66,034 |
Projections illustrative only. Investment returns are not guaranteed.
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How it works
LISA basics
Open a LISA between ages 18 and 39. Contribute up to £4,000 per year. HMRC adds a 25% bonus (up to £1,000/year). Accessible without penalty for: first home purchase (≤ £450,000) after 12 months of opening, or from age 60 for retirement.
The penalty for other withdrawals
Withdrawing for any other reason incurs a 25% penalty on the TOTAL withdrawal (not just the bonus). On a £4,000 contribution + £1,000 bonus = £5,000 total, a 25% penalty = £1,250 — so you actually lose £250 of your own money too.
LISA vs pension
For higher-rate taxpayers, pensions win (40% relief vs 25% bonus). For basic-rate taxpayers, it is more nuanced — pensions also attract employer contributions via salary sacrifice. LISA is often better for first-home purchase regardless of tax band.
Contributions stop at 50
You can continue to hold and grow a LISA after age 50, but no new contributions (and therefore no bonus) are allowed after your 50th birthday. The account remains open and can still be accessed penalty-free from age 60.
First home rules
The property must cost £450,000 or less. You must be a first-time buyer. The LISA must have been open for at least 12 months before you use it. It is used alongside a mortgage (you cannot use it to buy cash). Both partners in a couple can each use their own LISA on the same property.