Overview

• Lifetime ISA withdrawals for home purchases averaged £51,000 among the top 25 savers in the 2022-23 financial year, according to HMRC data.
• Over 42,800 withdrawals exceeded £10,000, with more than 11,200 accounts holding £20,000 or more.
• The scheme allows savers to contribute up to £4,000 annually, earning a 25% government bonus capped at £1,000 per year.
• Critics argue the £450,000 property price cap is outdated and excludes many first-time buyers as house prices rise.
• Withdrawals for non-qualifying reasons incur a 25% penalty, effectively reducing savings by 6.25% and prompting reform discussions.