When George Osborne introduced Lifetime ISAs (tax-free nest eggs) in his 2016 Budget, it was a rare incentive for a generation struggling with high student loans and shrinking pensions.
It worked: by the end of 2023, more than a million under-40s had signed up. But last year, the UK government pocketed £75.3 million in withdrawal penalties from 100,000 savers.
Many were caught by the Lisa’s £450,000 house price cap which hasn’t budged while house prices soared.
The Treasury Committee is reviewing whether Osborne’s scheme is still effective, and for many users the answer is clearly no, especially given the government’s focus on growth and its commitment to helping young people onto the housing ladder.
The committee’s evidence stage wraps up next week. Those with money still locked away will be hoping for a rule change soon.
