Type the current value, broken into the original contributions, the government bonuses received and the investment growth. The tool needs all three because the 25% charge applies to the gross balance, not the net contribution.

Select: first home (under £450k, residential mortgage, never owned before), age 60+, terminal illness, or other reason. Only the first three avoid the charge. Anything else triggers 25% on the gross amount withdrawn.

You can withdraw all or part of the LISA. The tool calculates the gross withdrawal request, the 25% charge if applicable, and the net amount that lands in your bank account.

The result panel highlights the net loss compared to what you originally contributed. For non-qualifying withdrawals it always shows a 6.25% loss on contributions plus the loss of all government bonuses and the investment growth that would have been tax-free.

If you no longer plan to buy a first home, the tool compares: leave funds invested until age 60 (penalty-free) vs withdraw now and pay 25%. For most users, leaving until 60 is materially better even after inflation.

If you are buying a first home, the tool checks the £450,000 cap, that the property is your primary residence, that you are using a residential mortgage, and that 12 months have passed since first contribution. It also walks through the conveyancer-led withdrawal mechanics so the bonus is preserved.

Originally the LISA charge was 25% to claw back the 25% bonus. Mathematically, however, applying 25% to the inflated balance does not equal the bonus paid: it always exceeds it because the charge base is bigger than the contribution base.

HMT acknowledged this in the original consultation but kept the formula because it discourages early withdrawal. During Covid the charge was temporarily reduced to 20% (which would have just clawed back the bonus); it reverted to 25% in April 2021.

The practical effect is that LISA is genuinely a long-term commitment. Treat it like a pension for first-home or age-60 purposes, not as a flexible savings account.

To withdraw penalty-free for first home:

• Property purchase price must be £450,000 or less
• Property must be in the UK and bought with a residential mortgage
• You must intend to live in it as your only or main residence
• You must not have owned residential property before, anywhere in the world (this includes inherited shares of property)
• The LISA must have been open for at least 12 months from first contribution
• Funds must be sent directly from the LISA provider to your conveyancer

Buy-to-let, second homes and shared ownership where you do not occupy the home do not qualify.

LISA after age 60: tax-free withdrawals, but contributions limited to £4,000 per year and contributions must stop at age 50.

Workplace pension: contributions get tax relief at your marginal rate (20%, 40% or 45%) plus employer match. Withdrawals after 55 (rising to 57 in 2028) have 25% tax-free with the rest taxable.

For basic-rate taxpayers without employer match, LISA is roughly equivalent. For higher-rate taxpayers, pension is materially better. For self-employed without a pension, LISA is a sensible supplement up to £4,000 a year.

The £450,000 cap was set in April 2017 when the average UK first-time buyer paid around £210,000 and London first-time buyers around £400,000. By 2025 London first-time buyers commonly pay £500,000+, so many London buyers find their property exceeds the LISA cap.

If you complete on a property over £450,000 using LISA money, the entire withdrawal becomes non-qualifying and incurs the 25% charge. The cap is per property, not per buyer.

The Treasury has been lobbied to raise it; as of 2025 there has been no announced increase.

Reasons to pause LISA contributions:

• You no longer plan to buy a first home and have 30+ years to age 60
• You have already maxed pension contributions and have other tax-advantaged options
• Your priority is short-term emergency fund or higher-rate-tax pension contributions

You do not need to withdraw the existing balance; just stop adding to it. The current pot continues to grow tax-free and can still be used for first-home purchase or age-60 access later.