Individual Savings Accounts

HM Treasury written question – answered on 7th April 2016.

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Photo of Lord Myners Lord Myners Non-affiliated

To ask Her Majesty’s Government why they set a five per cent exit charge for early closure of a lifetime ISA.

Photo of Lord O'Neill of Gatley Lord O'Neill of Gatley The Commercial Secretary to the Treasury

Whilst the Lifetime ISA is a product aimed at encouraging saving for the long term, the government understands that circumstances change so wants to ensure that people can access their own money if they need it whilst also keeping an incentive to leave funds invested for the long term or to help purchase a first home. The government proposes that savers can make withdrawals at any time for other purposes, but with the bonus element of the fund plus any interest or growth on it returned to the government, and a 5% charge applied.

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