Lifetime ISAs: Why they divide opinion

Liam Roberts had just finished university, but he was already thinking about how to buy a house and how to fund the retirement.

In 2018, he was looking for a way to make some savings and so he chose Jesus (Lisa) for life.

Anyone under 40 years of age can open a lisa to save retirement or buy the first home. The preservatives can put up to £ 4,000 per year and the government will increase by 25%.

“This is an excellent product,” says Liam, now 28 years old. “The government paid £ 4,000 to my first house.”

In 2022, he bought a two -bedroom house in Manchester in 2022, using cash savings and government bonus to help pay the Mortgage deposit.

Lisa was automatically closed and thus opened another one after receiving his job as an asset manager.

This time he shared Lisa for a stock and longer -term pension plans. Again, it puts a maximum of £ 4,000 a year and receives a 25% government bonus. From the age of 60, he can start withdrawal without a penalty.

“They are designed for long -term planning, or he says.

He knew what he had registered in a job with reading financial products and would work well for his circumstances.

Nevertheless, not everyone has the same information or does not have the same opportunity to make the most of Lisa’s benefits. There are a limited number of provider with High Street banks and non -building societies.

The effective Treasury Committee of the MPs, LISA Ripened for reformThere is a commitment of taxpayer funds.

You’ve contactd through many of you Your voice, your BBC To express your horror about the traps of the product.

There are two problems at the center of these concerns:

• Participating in the money withdrawal means that people face losing 6.25% of their savings.
• Cutting, which means lisa savings, can only be used when buying a property up to £ 450,000-A threshold that has not changed since the release of Lisas in 2017, especially in Southeast England

Those who are in communication were sentenced to punishment, especially after capturing £ 450,000.

One of them was Holly from London. The 28 -year -old boy says he lost £ 750 when he bought his house in 2023.

“I was very sorry because I have been using it to save a house for a house since I was 19, and I used the money to buy my first house as the plan wanted.”

At the age of 19, he said he felt too far away from the chance of buying more than £ 450,000, but his career went well and met his future husband.

“What bothers me is now I bought the house with my husband, and my share is £ 450,000, but of course it was not taken into consideration, or he says.

Daniel Slavin founded a Lisa in his 20s. At that time, as one person, he realized why the thresholds were there, and he thought it was a good product.

But for a few years quickly and now married, when he came to buy a house, he and his wife Lucy fouls £ 450,000.

Lucy says that when they still buy their Lisa without having to use their Lisa, Lucy makes them a difficult financial position.

“If we need to withdraw the money, it is incredibly annoying to know that our only option is to lose some of our savings if we need to withdraw money.”

“If you withdraw early, I can understand to lose the bonus, but the penalties are terrible.”

Daniel, a 33 -year -old doctor, has stopped paying his Lisa since then.

“The current government wants us to buy a house and increase growth, and I don’t think they need to do the right thing and punish us to save money, or he says.

He says they need to take into account inflation. “They must change the rules.”

Comments and campaignists are eager to see changes.

Martin Lewis, the founder of Moneysavingexpert, says the £ 450,000 threshold “unfair, unfair and rules should change”.

“If a lisa is used to buy a property on the threshold, there should be no fine, at least they must take back what they put.” He said.

“And this flaw does not only harm those with Lisas. Especially from lower -income past, many young people with a tendency to avoid more risk opens in the first place.”

Helen Morrissey, President of Pension Analysis at the Investment Platform Hargreaves Lansdown, said that Lisas has proved that he is popular among those with self -employed people who can save a workplace, although he did not reach a workplace pension.

However, he called for an early withdrawal penalty and an age limit to expand a LISA.

Lisas was launched in April 2017 under the conservative government at the time.

Since then, according to the latest figures, 6% of the appropriate adults has opened one, and about 1.3 million accounts are still open.

The views are clearly divided into how well they work among these account holders.

The government says LISA is a source of celebration, but it can deal with some concerns over time.

“Lifelong Isas aims to encourage young people to improve their saving habits in the longer term, to buy their first homes or to create a nest egg when they are older,” he said. He said.

He continued: “We welcome the committee’s report and now we will review the findings and we will respond in time.”

Additional reports by Alex Emery, Kris Bramwell and Shanaz Musafffer