Individual Savings Accounts
The question
To ask the Chancellor of the Exchequer, whether she plans to alter her policies on the (a) eligibility (b) use (c) thresholds for London house prices and (d) withdrawal penalties criteria for the Lifetime ISA.
Answered by Emma Reynolds
The Lifetime ISA remains narrowly focused on supporting people to achieve the aspiration of home ownership, or to build up savings for later life.
The property price cap supports most first-time buyers across the UK while targeting households that may find it most difficult to get onto the property ladder. Data from the latest UK House Price Index shows that while the average price paid by first-time buyers has increased since the introduction of the Lifetime ISA, it is still below the LISA property price cap in all regions of the UK except for London, where the average price paid is affected by boroughs with very high property values
Any unauthorised withdrawals are subject to a 25% withdrawal charge. This recoups the Government bonus, any interest or growth arising from it, and a proportion of the individual’s initial savings.
The Government keeps all aspects of savings tax policy under review.
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