Overview

• HMRC figures for 2024/25 report 129,200 unauthorised Lifetime ISA withdrawals that triggered about £102 million in charges, up from £75.3 million a year earlier.
• Some 87,250 savers used a Lifetime ISA to buy a first home in 2024/25, with an average withdrawal of £15,782.
• The 25% early withdrawal charge removes the government bonus and can reduce savers’ original contributions, a design widely criticised by advisers and providers.
• The Treasury Committee has questioned whether the product effectively supports those who need help, and the government has committed to improve provider messaging.
• HMRC also reports a record £103 billion subscribed to adult ISAs in 2023/24, driven by a £27.9 billion jump in cash ISA inflows as higher rates boosted the appeal of tax shelters.