Individual Savings Accounts

HM Treasury written question – answered on 22nd April 2016.

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Photo of Julian Knight Julian Knight Conservative, Solihull

To ask Mr Chancellor of the Exchequer, what estimate his Department has made of the number of people under 40 who will take up both a lifetime ISA and a standard ISA in each of the first three years that both those ISAs are available.

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

The Government is creating a new Lifetime ISA, providing savers with the flexibility to save towards a first home and retirement at the same time. From April 2017, people aged 18 to 40 will be able to open and save up to £4,000 each year into a Lifetime ISA and receive a 25% bonus from the Government, paid annually after the end of the tax year.

People can make full withdrawals from their Lifetime ISA accounts for a first home purchase (subject to a house price cap of £450,000 UK-wide) or from age 60. These withdrawals will be tax free.

The Lifetime ISA is a voluntary product. For further information on the costing of this policy, please see page 9 of the Budget 2015 Policy Costings document: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/508147/PU1912_Policy_Costings_FINAL3.pdf

More than 350,000 first time buyers have opened a Help to Buy ISA since it became available.

ISA statistics are published on the GOV.UK website. Table 9.7 sets out the number of individuals subscribing to ISAs: https://www.gov.uk/government/statistics/number-of-individuals-subscribing-to-an-individual-savings-account-isa-by-income

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