LISA0037

Written evidence submitted by Anonymous

I believe that the Lifetime ISA is a product that is unfit for purpose for first time buyers in South-East England.

I set up a Lifetime ISA for my son in 2016 and he added to it in subsequent years. When he came to buy his first house in 2022, the cheapest starter homes were £500k plus and he ended up with a mid terrace house in Smallford outside St. Albans for £600k. His Lifetime ISA was useless to him and he will now be penalised for withdrawing the money which he needs for a new baby.

He will have a good pension from his company so does not need this money for his retirement. He needs it now to fund his huge mortgage payments and the cost of providing for his new baby.

I believe the threshold for the Lifetime ISA should be raised to at least £600k for those living in the South East and this threshold should reflect current starter home prices First time buyers who have been unable to use the Lifetime ISA in its current format should be able to withdraw their money penalty free with an appropriate level of interest paid for the time their money has been invested.

If the threshold is not raised, then I believe the Lifetime ISA should be abolished and replaced with a product which can be used by all first time buyers throughout England. People living in the South East are already punished enough with a lack of affordable housing.

January 2025