How much is the Lifetime ISA withdrawal charge?

25% of the amount taken out, unless the money goes towards a first home costing up to £450,000, you are 60 or over, or you are terminally ill. The charge is taken from the whole withdrawal, bonus included, so it takes back more than the 25% bonus: 6.25% of what you paid in, before any growth.

What happens if my first home costs more than £450,000?

From 29 October 2026 a first home over the £450,000 cap carries a reduced charge of 20% rather than 25%, as announced at Budget 2026. The change is not retrospective: a withdrawal made before that date carried the 25% charge, which the date field reflects.

When can I withdraw from a Lifetime ISA without a charge?

To buy a first home costing £450,000 or less at least 12 months after your first payment in, using a conveyancer and a mortgage; from age 60; or if you are terminally ill with less than 12 months to live. On death the account closes and the funds pass with no charge.

How does the government bonus work?

You can pay in up to £4,000 a year until you are 50 and the government adds 25%, up to £1,000 a year. The bonus is paid into the account, so a withdrawal includes it, and the charge applies to the whole amount.

Does the charge depend on the tax year?

Only through the date of the withdrawal: the tool reads the rules as at the date you enter, so a first home over the cap is charged at 25% before 29 October 2026 and 20% from that day.

Calculators

Lifetime ISA withdrawal charge calculator

The charge on a withdrawal by reason and date, with what you receive and how it compares with what you paid in. The reduced charge for a first home over the price cap applies from 29 October 2026.

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Withdrawal charge

£0on £10,000

You receive: £10,000
Charge rate: 0%

A first home costing £300,000.00 is at or under the £450,000 price cap, so there is no withdrawal charge.

The working

The charge on a £10,000 Lifetime ISA withdrawal on 9 November 2026
Line	Rate	On	Amount	Source
			£10,000.00
£10,000.00 taken from the Lifetime ISA, including the government bonus it holds.
	25%	£8,000.00	£2,000.00	gov.uk
If the pot grew only from the 25% bonus, £8,000.00 was paid in and £2,000.00 is bonus. Interest or growth would change the split. Checked 8 November 2026, in force.
	0%	£10,000.00	£0.00	gov.uk
A first home costing £300,000.00 is at or under the £450,000 price cap, so there is no withdrawal charge. £10,000.00 × 0% = £0.00. Checked 7 November 2026, in force.
			£10,000.00
£10,000.00 − £0.00 = £10,000.00.

How this is calculated

Reason. A first home costing up to £450,000, age 60 or over, or terminal illness: no charge. A first home over £450,000: 20% from 29 October 2026, 25% before. Anything else: 25%.
Charge. The rate times the whole amount withdrawn, bonus included, rounded to the penny.
What was paid in. If the pot grew only from the 25% bonus, the amount withdrawn divided by 1.25 is what you paid in. The last line compares that with what you receive.

The date field reads the rules as they stood on that day, so the change on 29 October 2026 shows through the rules file rather than a special case. The formulas run from the open rules file for 2026/27.

Rules used

Tax year: 2026/27 (6 April 2026 to 5 April 2027)
Nation: England and Northern Ireland
Figures: Checked between 7 November 2026 and 8 November 2026. Status: in force.
Next scheduled change: 6 April 2027: New tax year. Savings and property income rates rise to 24%, 44% and 49%, the trading allowance rises to £3,000, the Pension Tax Allowance begins and the mileage rate above 10,000 miles rises to 35p.
Every figure: Rates and allowances for 2026/27, each with its source and the date it was checked.

What changes on 6 April 2027

New tax year. Savings and property income rates rise to 24%, 44% and 49%, the trading allowance rises to £3,000, the Pension Tax Allowance begins and the mileage rate above 10,000 miles rises to 35p.

None of the figures this tool uses is set to change on that date, as far as 2027/28 has been announced.

What this does not do. It does not model interest or investment growth inside the account, a withdrawal split across several purposes, transfers between ISAs, the 12 month rule after the first payment, or the Help to Buy ISA. It never suggests what to do with the result.

Questions people ask

How much is the Lifetime ISA withdrawal charge?: 25% of the amount taken out, unless the money goes towards a first home costing up to £450,000, you are 60 or over, or you are terminally ill. The charge is taken from the whole withdrawal, bonus included, so it takes back more than the 25% bonus: 6.25% of what you paid in, before any growth.
What happens if my first home costs more than £450,000?: From 29 October 2026 a first home over the £450,000 cap carries a reduced charge of 20% rather than 25%, as announced at Budget 2026. The change is not retrospective: a withdrawal made before that date carried the 25% charge, which the date field reflects.
When can I withdraw from a Lifetime ISA without a charge?: To buy a first home costing £450,000 or less at least 12 months after your first payment in, using a conveyancer and a mortgage; from age 60; or if you are terminally ill with less than 12 months to live. On death the account closes and the funds pass with no charge.
How does the government bonus work?: You can pay in up to £4,000 a year until you are 50 and the government adds 25%, up to £1,000 a year. The bonus is paid into the account, so a withdrawal includes it, and the charge applies to the whole amount.
Does the charge depend on the tax year?: Only through the date of the withdrawal: the tool reads the rules as at the date you enter, so a first home over the cap is charged at 25% before 29 October 2026 and 20% from that day.

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