LISA0081

Written evidence submitted by Anonymous

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

No – it is a poor choice for both. The property limit on the LISA has not kept up with the increases in property prices. This greatly affects people who are looking to buy in London. It is a poor choice for pension saving because higher rate tax payers are better off paying into a pension.

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 think the LISA is a poorly design product for pensions saving, so no, people should not transition from using the LISA for house purchase and then to a product for saving for a pension.

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

I honestly have no idea, probably not.

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

It depends on what you’re saving for. If you want to save until you’re 60, sure. But then, why not just use a proper pension product?

5. Should the Lifetime ISA be abolished?

No, it should be used to help people purchase property.

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

Yes, please remove this penalty. At 25% penalty, you are penalising those who realise that they want to purchase a property of more than £450,000, they lose 6.25% of their own money. How is this fair?

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?

Yes, it should be removed, if not, then it should be in line with the higher of inflation or property price increases.

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

Yes.

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

Just remove the penalty and increase the house price cap. That’s all people want.

January 2025