LISA0091

Written evidence submitted by Anonymous

I am a 33 year professional living in the South East and working in London. I opened a lifetime ISA in the 2017/18 fiscal year, intending to use it towards a house deposit. I am submitting evidence because I believe it is unfair that the house price cap has not been raised since the lifetime ISA was introduced and there also is a withdrawal penalty. I have not contributed to my lifetime ISA in almost four years because I do not want my money to be 'trapped' in the account.

When I signed up for my lifetime ISA in 2017 it was heavily implied that the price cap would be reviewed regularly. This has not happened and I now feel that the product that I signed up for is not the same one that I own now. If the cap had been increased in line with house price inflation in my region it would now be around £550k.

In my opinion the withdrawal penalty is unfair, but I could understand it if the house price cap had been increased in line with house price inflation. The fact the house price cap has not been increased and there also a withdrawal penalty feels punitive. The house price cap either needs to reviewed regularly in line with house price inflation, or the withdrawal penalty needs to be removed.

January 2025