Overview

• 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• He highlighted the £450,000 property price cap as outdated, given rising house prices, and called for it to be increased to at least £500,000.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.