Select Committee · Treasury Committee

Lifetime ISA

Status: Closed Opened: 6 Jan 2025 Closed: 11 Sep 2025 6 recommendations 9 conclusions 1 report

The Treasury Committee is inquiring into whether the Lifetime Individual Savings Account (LISA) is still an appropriate financial product nine years after it was created. Read the call for evidence to find out more about this inquiry.

Reports

1 report

Title	HC No.	Published	Items	Response
8th Report - Lifetime Individual Savings Account	HC 607	30 Jun 2025	15	Responded

Recommendations & Conclusions

4 items

1 Conclusion 8th Report - Lifetime Individual Saving… Acknowledged

Lifetime ISA may not be an efficient use of taxpayer money for its dual objectives.

We endorse the Government’s policy objectives of supporting first-time buyers and encouraging long-term retirement savings. However, the Lifetime ISA may not be the most efficient use of taxpayers’ money to achieve those disparate objectives, which might require separate, tailored policies. (Conclusion, Paragraph 24)

Government response. The government committed to working with the industry to consider ways to improve messaging around Lifetime ISAs, while reaffirming its commitment to making ISAs simple and flexible.

HM Treasury

2 Conclusion 8th Report - Lifetime Individual Saving… Acknowledged

Cash Lifetime ISAs may not achieve optimal long-term retirement outcomes compared to invested assets.

Some Lifetime ISA providers only offer the cash Lifetime ISA. Retirement savings held within cash Lifetime ISAs may not achieve the best outcome for a Lifetime ISA holder over the long term, compared with investing in higher risk but higher return assets such as bonds and equities. (Conclusion, Paragraph 25)

Government response. The government reiterated the purpose and success of the Lifetime ISA and stated that it keeps all aspects of the policy under review and carefully considers all representations received, without committing to specific action on the performance of cash LISAs.

HM Treasury

7 Conclusion 8th Report - Lifetime Individual Saving… Acknowledged

Lifetime ISA may not be suitable for additional rate taxpayers, despite benefits for others.

We recognise the risks for certain individuals opting to save for retirement in a Lifetime ISA instead of a workplace pension, because of lower tax relief for higher- and additional-rate taxpayers and forgoing employer contributions. Although we recognise that it can be a valuable complementary saving product for many, such …

Government response. The Government recognises the importance of the Lifetime ISA and is publishing two pieces of externally commissioned research on GOV.UK to further improve our understanding of how the LISA is used.

HM Treasury

8 Conclusion 8th Report - Lifetime Individual Saving… Acknowledged

Consider self-employed interests in any future ISA market reforms due to historically low savings.

The available evidence indicates that saving for retirement with a Lifetime ISA is working well for self-employed people. Any Government reforms to the ISA market must take the interests of the self-employed into account, because self-employed people have historically achieved low levels of retirement saving. (Conclusion, Paragraph 87)

HM Treasury

Oral evidence sessions

2 sessions

Date	Witnesses
23 Apr 2025	Emma Reynolds MP · Department for Environment Food and Rural Affairs, Laura Webster · HM Treasury	View ↗
26 Feb 2025	Anne Fairweather, Head of Government Affairs and Public Policy at Hargreaves Lansdown, Brian Byrnes, Head of Personal Finance at Moneybox, Charlotte Harrison, Chief Executive of Home Financing at Skipton Building Society, Funmi Olufunwa, Finance Expert and Founder of Hoops Finance, Martin Lewis, Founder and Executive Chair of Money Saving Expert, Michael Johnson, Research Fellow, Richard Stone, Chief Executive at the Association of Investment Companies	View ↗

Correspondence

10 letters

Date	Direction	Title
6 May 2025	—	Correspondence from HMRC on quantitative and qualitative research on Lifetime I…
22 Apr 2025	—	Correspondence from Skipton Building Society regarding Lifetime ISA data reques…
22 Apr 2025	—	Correspondence from the Chair to Skipton Building Society regarding Lifetime IS…
22 Apr 2025	—	Correspondence from Hargreaves Lansdown regarding Lifetime ISA data request, da…
22 Apr 2025	—	Correspondence from the Chair to Hargreaves Lansdown regarding Lifetime ISA dat…
22 Apr 2025	—	Correspondence from Moneybox regarding Lifetime ISA data request, dated 9 April…
22 Apr 2025	—	Correspondence from Moneybox regarding Lifetime ISA data request, dated 21 Marc…
22 Apr 2025	—	Correspondence from the Chair to Moneybox regarding Lifetime ISA data request, …
22 Apr 2025	—	Correspondence from HM Revenue and Customs regarding Lifetime ISA data request,…
22 Apr 2025	—	Correspondence from the Chair to HM Revenue and Customs regarding Lifetime ISA …