Government urged to build on success of Lifetime ISAs
Moneybox, the largest provider of the Lifetime ISA (Lisa) in the UK has issued an open letter urging Chancellor Rachel Reeves to avoid costly “policy theatre” by building on the success of the Lisa rather than replacing it.
It said that the Lisa has already helped more than 300,000 first-time buyers across the UK onto the property ladder since it launched in 2017.
The call comes as the UK Government prepares to consult on potential changes to first-time buyer support, including the introduction of a new product from 2028.
Moneybox warns that replacing the Lisa risks reintroducing challenges the savings vehicle was designed to address, while adding complexity for the more than 1.5 million consumers using it to save for a first home or retirement.
The letter sets out the case for targeted reforms to strengthen the existing Lisa product, such as reviewing the property price cap and withdrawal rules, while maintaining its core benefits.
The key asks from Moneybox are:
◆ Retain the Lisa for new customers, rather than introducing a replacement product.
◆ Commit to an annual review of the house price cap to ensure it keeps pace with market conditions.
◆ Reform the withdrawal penalty by reducing it to20 per cent so that savers are not unfairly penalised.
Brian Byrnes, director of personal finance at Moneybox, says: “The evidence shows the Lisa is working for the vast majority of users, supporting consistent saving and better long-term financial outcomes. With over 1.5 million active savers relying on it, a consultation risks adding unnecessary complexity for consumers without addressing the underlying issues used to justify replacing the product.
“As the UK’s largest Lisa provider, we will engage constructively with HM Treasury to ensure any future approach builds on what works, strengthens saving behaviour, and delivers sustainable support for first-time buyers.”
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