LISA0022

Written evidence submitted by Anonymous

As an individual who is a higher rate earner and has a Lifetime ISA as well as a workplace Pension (via NEST) – I am a firm believer that the Lifetime ISA is a great product but does need tweaks to make it more enticing.

My comments come from a user as saving for as a supplement for retirement Income – rather than as a home buyer, however it must be known – I am 100% in favour of keeping this product and not discarding it.

• Allow contributions to the age of 55 not 50 (i.e. 10 years prior to withdrawal that it should stop being added upon).
• As a further reform – during the age where individuals cannot top up – there needs to be an incentive to benefit the savers during these year – for example the interest rate is guaranteed at c.4% or is the BoE base rate +1.5% (whatever is highest)
• Increase amount that can be deposited by c.£200-£250 every year.
• Lifetime ISA should be available to anyone – regardless of circumstances – to maximise the habit of saving for retirement
• While putting into a pension directly is an option – few companies offer to match any top-up over and above the statutory minimum

Penalty removing from Lifetime ISA

• If do not fit the criteria for home buying (due to house price inflation) – then should be no / limited penalty.
• If as a retirement option – then penalty should remain – assuming incentive interest rate is adopted as per above.

January 2025