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Individual Savings Accounts

Treasury written question – answered on 20th May 2020.

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Photo of Kirsten Oswald Kirsten Oswald Shadow SNP Spokesperson (Northern Ireland), Shadow SNP Spokesperson (Wales), Shadow SNP Spokesperson (Work, Pensions and Inclusion)

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of removing penalties from savers who need to withdraw funds from lifetime ISAs to enable them to tackle financial difficulties as a result of the covid-19 outbreak.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

As announced on 1 May 2020, to help investors withdraw funds from their Lifetime ISA during the COVID-19 pandemic the withdrawal charge has been temporarily reduced from 25% to 20%. The reduced withdrawal charge applies to all unauthorised withdrawals made in the period from Friday 6 March 2020 until Monday 5 April 2021. This means savers will get back all the money they originally put in, subject to any investment losses incurred on stocks and shares Lifetime ISAs. There is no withdrawal charge if it is made to buy a first home or the investor has a terminal illness.

Further information on the reduced charge is available at: www.gov.uk/guidance/lifetime-isa-withdrawal-charge-reduced-to-20

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