LISA0035

Written evidence submitted by Anonymous

My wife and I married earlier in 2024 after being together for around 7 years. We are both veterinary surgeons and have each been paying into LISAs since their inception.

As working professionals we have both paid the maximum we can into our LISAs each year but have been late to purchasing our first home due to numerous factors including myself undertaking a year of further university training and also COVID leading us to have to move and locum temporarily.

We’re now looking to purchase our first home but also start a family. We would like this home to be our forever home that we can raise a family in and grow. However due to inflation and rising house prices we are in a position where the homes we are ideally looking at are just out of reach due to the LISA limit.

I believe it is fair that there is a withdrawal penalty for using the funds for a purpose not listed or within the rules but the current penalty unfairly takes a portion of the savers original deposit. I do not believe this is a fair penalty in a product designed to help people purchase their first homes.

The LISA house price limit has also not been adjusted or increased in line with inflation. This limit should be urgently reviewed and increased or abolished completely. If the product is being used to purchase a first home I do not believe there should be a limit of any kind.

The LISA in it’s current state has trapped us and a large portion of our savings behind these limits and penalties and is actively delaying our entry into the housing market. On top of this we are now going to be paying increased stamp duty this year which is another blow to people trying to own their first homes.

Understandably £450,000 is a lot of money and when I first started paying into my LISA I didn’t dream of purchasing a house over £450,000 but prices have dramatically risen since then and the limit has stayed static. The LISA is available to people from all walks of life and for a married couple who are both professionals, 9 years qualified, it now does not allow us to purchase the house that we otherwise would if the funds were within a standard savings account.

Please would the government consider abolishing or at the least reducing the punitive withdrawal fee for going over the LISA limit. Or better yet just increase the LISA limit and review it yearly so that it can rise with inflation and not trap people.

January 2025