Overview
- The government consultation proposes ending new Lifetime ISA (LISA) applications and introducing a First-Time Buyer's ISA focused on home purchases.
- A LISA currently gives a 25% bonus on up to £4,000 of contributions each tax year, meaning savers can receive up to £1,000 in state top-up annually.
- Personal finance expert Martin Lewis has urged people aged 18 to 39 to open a LISA immediately, even with a nominal deposit such as £1, because existing accounts would be retained if the scheme closes.
- Under the proposals, first-time buyers could still get bonuses for property purchases but there may be no equivalent bonus for using the account as a retirement vehicle.
- The policy is still a consultation and not finalised so savers should weigh options now because closing applications would change who can benefit from the LISA in future.