Source · Select Committees · Treasury Committee
Recommendation 4
4
Accepted
Balance reducing the Lifetime ISA withdrawal charge against government spending impact, retaining deterrent.
Conclusion
Many people have lost a portion of their savings due to a lack of understanding of the withdrawal charge or because of unforeseen changes in their circumstances, such as buying a first home at a price greater than the cap. However, the case for reducing the charge must be balanced against the impact on Government spending. The Lifetime ISA must include a deterrent to discourage savers from withdrawing funds from long-term saving. (Conclusion, Paragraph 46) Saving for a home with the Lifetime ISA
Government response summary AI-generated
The government committed to considering the recommendation in future policy development and specifically to working with industry and other government departments to improve messaging about the implications of savings and investments for Universal Credit entitlement.
Government Response
The government responded to this report on 11 September 2025. No passage in that response could be matched to this conclusion. Read the response document ↗