LISA0083

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 not currently fit for purpose as the limits imposed on it make it nearly impossible to be used by first time buyer for a property in London. With the average cost for a 2 bed well exceeding the £450K limit

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 have not done this.

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

Unsure.

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

Unsure.

5. Should the Lifetime ISA be abolished?

No it can be a great tool to help first time buyers get onto the property ladder., however changes need to be made.

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

Yes, there should be no penalty for withdrawing money if it will not be used for a property as many people are now having to withdraw it due to the 450K purchase limit not matching rising house prices.

I would suggest that instead if the money is withdrawn you just get back what you initially put in and not the government bonus.

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?

I believe it should either be removed or the cap should be increased if a property is being purchased jointly.

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

Yes, I believe it should be raised to £5k, however this is not the main issue with the Lifetime Isa. The property price limit is a much bigger issue,

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

 If a property is being purchased jointly eg.with a partner. Then the limit should be adjusted to take this into account. As it is very difficult to buy in London with a partner for below £500k .

I believe the limit should be raised to £600K

January 2025