Individual Savings Accounts
The question
To ask the Chancellor of the Exchequer, whether her Department has considered changing the withdrawal percentage for Lifetime ISAs.
Answered by Emma Reynolds
The Lifetime ISA (LISA) is designed to support people to achieve the aspiration of homeownership, or to build up savings for their later life. LISA funds, including any Government bonus, can be withdrawn for the purchase of a first home under £450,000, in the case of terminal illness or from the age of 60.
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. Reducing the withdrawal charge would encourage the use of LISAs in ways for which they were not intended.
The Government keeps all aspects of savings tax policy under review.
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