Lifetime ISA: bonus, withdrawal charge and property cap
The Lifetime ISA contribution limit and government bonus are separate from the conditions for taking money out. A property price cap is only one first-home withdrawal condition.
- Annual contribution limit
- £4,000, counting towards the £20,000 adult ISA allowance for 2026–27.
- Government bonus
- 25%, up to £1,000 per year.
- Unauthorised withdrawal charge
- 25% of the withdrawal, including the bonus.HMRC, Lifetime ISA withdrawals
- First-home property cap
- £450,000 or less, subject to all other withdrawal conditions.HMRC, Lifetime ISA withdrawals
Contribution and bonus
HMRC publishes an annual Lifetime ISA contribution limit of £4,000. It counts towards the £20,000 adult ISA limit for 2026–27. The government adds a 25% bonus, capped at £1,000 per year. HMRC, Lifetime ISA (opens in a new tab).
The first payment must be made before age 40. Contributions and bonus eligibility stop at age 50, while the account can remain open. HMRC, Lifetime ISA (opens in a new tab).
Withdrawals and buying a first home
Charge-free withdrawals cover a qualifying first-home purchase, age 60 or over, or terminal illness with less than 12 months to live. Other withdrawals carry a 25% charge. HMRC, Lifetime ISA withdrawals (opens in a new tab).
A qualifying first home costs £450,000 or less. The purchase must be at least 12 months after the first payment, use a conveyancer or solicitor, and be bought with a mortgage. The price cap alone does not establish eligibility. HMRC, Lifetime ISA withdrawals (opens in a new tab).
The withdrawal charge applies to the amount withdrawn, including the government bonus. It is not limited to removing the bonus. HMRC, Lifetime ISA withdrawals (opens in a new tab).
Worked example and exclusions
Worked example using the money.financial calculator. For a £4,000 contribution, the calculator returns a £1,000 bonus and £4,000 of adult allowance use for the 2026-27 tax year. It excludes investment growth, interest, fees, withdrawal charges and eligibility decisions.
The linked ISA calculator models allowance use and the bonus, not permission to withdraw. This general explanation adapts HMRC material under the Open Government Licence v3.0, without endorsement or a recommendation to open an account.