LISA0078

Written evidence submitted by Anonymous

My name is xxxxxx, I’m from Bilbao in Spain, I work at xxxxxxxxxx at its head office in xxxxxxx in xxxxxxxxxxxxxx and currently hold around £10,000 in a two-year Lifetime ISA at Hargreaves Lansdown.

The following answers are, in my opinion, how the LISA product should be reformed.

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

Yes, but with modifications.

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’m using my LISA for a house purchase, and I won’t be using it as a pension saving.

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

I don’t know.

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

I doubt it. Everyone that I know of is using their LISAs to purchase a house.

5. Should the Lifetime ISA be abolished?

No, but it should be modified.

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

Yes. The withdrawal penalty should be completely removed.

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?

The LISA’s house price cap should be completely removed. Everyone should have the same rights, whether someone uses the LISA to buy a £500,000 house or someone uses their LISA to buy a £100,000,000 house.

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

The LISA limit should be raised to the maximum allowance of the ISA, whether this is £20,000 or more in the future. The 25% bonus must still apply up until the maximum limit. If the limit is £20,000, for instance, the government bonus would be £20,000 x 0,25% = £5,000.

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

The rise in the stamp duty should be taking into consideration when reforming the LISA. You cannot provide an incentive in the LISA and then increase the stamp duty by multiples of the LISA’s incentive, because you make the LISA completely useless.

Please,

-          Completely remove the LISA’s house price cap,

-          Raise the annual LISA limit to the annual limit of the ISA, maintaining the 25% government bonus up until the ISA’s maximum limit.

January 2025