Martin Lewis Calls for Urgent Reforms to Lifetime ISA Rules

The financial expert criticized penalties, property price caps, and age restrictions, urging the UK government to address key flaws in the savings scheme.

• Martin Lewis told the Treasury Committee that the Lifetime ISA has significant design flaws despite being popular among first-time homebuyers.
• He highlighted the £450,000 property price cap as outdated, given rising house prices, and called for it to be increased to at least £500,000.
• Lewis criticized the 25% withdrawal penalty, explaining that it effectively reduces savers' funds by 6.25%, even when they withdraw for legitimate reasons like exceeding the property cap.
• The age restriction preventing individuals over 40 from opening a Lifetime ISA was described by Lewis as discriminatory and limiting access to the scheme.
• He also pointed out that the product is unsuitable for retirement savings for most people and is not widely offered by major banks due to concerns over mis-selling risks.

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