Individual Savings Accounts: Fees and Charges

Treasury written question – answered at on 5 July 2023.

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Photo of Andrew Rosindell Andrew Rosindell Conservative, Romford

To ask the Chancellor of the Exchequer, whether his Department plans to reduce the Lifetime ISA withdrawal penalty.

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

The LISA is designed to support people to achieve the aspiration of homeownership, or to build up savings for their later life. LISA funds, including any Government bonus, can be withdrawn for the purchase of a first home under £450,000, in the case of terminal illness or from the age of 60.

Although the government recognises that some individuals may wish to access their LISA savings for purposes other than those listed above, the Government considers that the charge is needed to protect the LISA’s status as a long-term savings product.

Removing or reducing the withdrawal charge would not be consistent with this and would encourage the use of LISAs in ways for which they were not intended.

The Government keeps all aspects of the savings tax regime under review.

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