Overview
- The allowance will be restructured from April 2027 so only £12,000 can be deposited into any ISA type, with a further £8,000 restricted to investment-based accounts, and savers aged 65 and over exempt.
- The government will consult on a first-time-buyer-only replacement for the Lifetime ISA that delivers the bonus at home purchase and removes the withdrawal charge.
- Existing Lifetime ISAs remain available to open until the new product launches, and current holders can keep saving under the present rules indefinitely.
- HMRC’s Cerys McDonald told the Treasury Committee that ministers, following HMRC advice, favor a product focused on first-time buyers because the current hybrid model causes confusion.
- Under current Lifetime ISA rules, savers can deposit up to £4,000 a year with a 25% bonus for a first home or access at 60, non-qualifying withdrawals incur a 25% charge, accounts can be opened from 18 to 39, and contributions can continue until 50.