Answers · UK 2025/26
How does the Lifetime ISA government bonus work in 2026/27?
The Lifetime ISA lets you save up to £4,000 a year and receive a 25% government bonus on top, worth up to £1,000 a year, for use toward a first home (up to £450,000) or retirement from age 60. The £4,000 limit counts within your overall £20,000 ISA allowance.
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A Lifetime ISA (LISA) allows adults aged 18 to 39 to save up to £4,000 a year, with the government adding a 25% bonus on top of whatever is paid in, up to a maximum bonus of £1,000 a year if the full £4,000 is contributed. This £4,000 limit counts as part of, not in addition to, the overall £20,000 annual ISA allowance for 2026/27 -- so someone paying £4,000 into a Lifetime ISA has £16,000 of their remaining ISA allowance left for other ISA types in the same tax year. The bonus is paid monthly (for cash LISAs) or at set intervals depending on the provider, and the money can be used in two ways: to help buy a first home worth up to £450,000, or withdrawn from age 60 onwards for retirement, in both cases completely tax-free including the bonus. Withdrawing for any other reason before age 60 -- other than a qualifying first home purchase or in cases of terminal illness -- triggers a 25% government withdrawal charge, which effectively claws back the bonus and a small amount of your own original contribution too, making early withdrawal for non-qualifying reasons a poor financial decision in most cases. You can hold a Lifetime ISA alongside other ISA types and continue contributing until age 50, though the government bonus stops being added once you reach that age even if the account remains open.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.