Overview

• The committee’s report shows the top 25 unauthorised Lifetime ISA withdrawals averaged £42,300, generating an average penalty of £10,600 per saver.
• MPs warn the unchanged £450,000 property cap since 2017 excludes many first-time buyers and triggers hefty charges on over-cap home purchases.
• Lawmakers caution that the scheme’s combined first-home and retirement objectives confuse savers and risk mis-selling unsuitable products.
• Treasury data for 2023-24 reveal nearly 100,000 unauthorised withdrawals compared with just 56,900 uses for home purchases.
• The UK Government is expected to outline ISA review proposals before the Autumn Budget but has not yet confirmed any legislative reforms.