LISA0123

Written evidence submitted by Anonymous

I am a 30-year-old Cambridge resident who is currently looking to purchase my first home, and I would like to share my thoughts on the Lifetime ISA in 2025.

I have been saving into a Lifetime ISA (LISA) since May 2021, when I made the decision to convert my Help To Buy ISA into a Lifetime ISA due to the higher house price cap. Until I began looking for a house in November 2024, I felt confident in its potential to support those saving for a first home. However, house prices have increased dramatically since I opened my LISA in 2021, and historically since the LISA was introduced in 2017.

As I’m sure you can appreciate, both economic and personal circumstances can change greatly over 8 years, and many people who opened a LISA to save for a first home will now purchase homes costing over £450,000. For this reason, I feel that the 25% withdrawal charge is unfair in 2025, as these people will stand to lose money in actual terms, with those losses being even greater after adjusting for inflation.

I hope that the government will consider removing the 25% withdrawal charge for LISAs as soon as possible, so that first time buyers are not penalised for circumstances outside of their control.

Thank you very much for your time.

January 2025