LISA0062

Written evidence submitted by Anonymous

I am submitting this evidence as an individual. I am using the Lifetime ISA to save for a deposit for a house.

1. Is the Lifetime ISA fit for purpose in its current design, including as a combined product for house purchase and pension saving?

No. I have paid into the LISA to save for a house deposit, however I am unable to use it to buy a house with my partner in the area that we live in because the house prices are above the £450k house price limit. I am reluctant to withdraw my money due to the withdrawal penalty and I do not want to use the LISA for pension saving.

2. How well do consumers transition between using the Lifetime ISA as a product for house purchase, to then a product for pension saving?

I don’t intend on using the LISA for pension saving, I would close it once I have used it to save for a deposit to buy a house.

3. Given its policy purposes, is the Lifetime ISA value for money for the Government?

I don’t have the data to answer this. Has it helped first time buyers get on the housing ladder? Do first time buyers find it easier to save for a house now than before the LISA was introduced? I expect not due to the unsustainable increase in house prices.

4. Is the Lifetime ISA a suitable pension savings product?

No comment.

5. Should the Lifetime ISA be abolished?

If the house price cap isn’t increased, then yes and the LISA withdrawal penalties should be removed. If the LISA is abolished, the government could use the amount saved from not paying out bonuses, towards building new houses.

6. Should the Lifetime ISA be reformed to remove the withdrawal penalty?

Yes.

7. Should the Lifetime ISA be restricted to those with no access to a workplace pension?

 No.

8. Should the Lifetime ISA house price cap be raised in line with inflation, or removed?

It should be increased initially considering the last few years of inflation, then it should increase in line with inflation going forward.

9. Should the annual Lifetime ISA limit be raised from £4,000?

 Yes, this should also increase in line with inflation.

10. Should the Lifetime ISA be reformed in any other way?

The house price cap should be increased for purchases made by a couple who are using savings and bonuses from two LISA’s. A couple who would like to have a family are less likely to want to buy a 1-bed apartment, which is all you can get in most of the London area with the £450k house price cap.

January 2025