UK Lifetime ISA growth with 25% government bonus.
Final value
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Your contributions
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Government bonus
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Worked example
Pay in the full £4,000 a year for 10 years and the government adds its 25 percent bonus on every contribution. Your own money totals £40,000 and the bonus adds £10,000, so £50,000 of contributions go to work. At a 6 percent average annual return, with each year's money invested from the start, the pot grows to roughly £69,858. That is about £19,858 of tax-free growth on top of the contributions and bonus combined. The bonus is effectively an instant 25 percent uplift, which is hard to beat, but it only pays off if you use the money for a first home under £450,000 or wait until age 60.
| Item | Amount |
|---|---|
| Your contributions (10 years) | £40,000 |
| Government bonus (25%) | £10,000 |
| Tax-free growth at 6% | £19,858 |
| Final LISA value | £69,858 |
How it is calculated
The tool applies the 25 percent government bonus to your contributions, so an annual £4,000 effectively becomes £5,000 going into the account. It then grows that boosted amount using the future value of an annuity-due, assuming each year's money is invested from the start and compounds for the remaining years. Your own contributions and the bonus are tracked separately so you can see how much of the final pot is free money. The £4,000 annual cap sits inside the wider £20,000 ISA limit, and you can only open and pay into a Lifetime ISA between ages 18 and 50. The crucial catch is the withdrawal rule: taking money out for anything other than a first home under £450,000 or reaching age 60 triggers a 25 percent penalty on the amount withdrawn, which is more than the bonus and leaves you worse off than a standard ISA, so the projection assumes you keep to the qualifying conditions.