Today, the Treasury Select Committee (TSC) released their report into the Lifetime ISA (LISA).

Having campaigned for the Lifetime ISA for many years on behalf of our community – the UK’s largest community of LISA savers* – and presented compelling evidence to the TSC alongside other providers and industry experts, here’s our update on the conclusions and recommendations of the report and what it means for Lifetime ISA savers.

Right now, there are no changes to the LISA. This report is a recommendation, not a decision. HM Treasury will consider the report ahead of the Autumn Budget, where any changes may be confirmed.

The report recommendations and our take

We firmly believe that by future-proofing the house price cap and amending the withdrawal penalty, the LISA would continue to serve as a highly effective product, helping young people build and embed positive saving behaviours early in life, get more people onto the property ladder, and prepare for a more secure retirement.

You can read the full report here.

Here’s an overview:

TSC “endorse the Government’s policy objectives of supporting first-time buyers and encouraging long-term retirement savings.” (Conclusion, Paragraph 24) However, state that the LISA should be reviewed to ensure the most efficient use of taxpayers’ money.

Our take:

  • Over the past six months, we have presented compelling evidence, much of which has been reflected in the report, to the Committee showing the powerful impact of the LISA – helping a whole generation of young people build and embed positive saving habits and get on the property ladder far sooner than would have otherwise been possible.
  • While it is right that the government ensures the LISA provides value for money as part of its review of the product, it is our view that it absolutely does. Nearly 3 million young savers and investors have already benefitted from using a LISA and nearly 250,000 first time buyers using the LISA to purchase their first home (HMRC ISA Statistics).

When it comes to the LISA unauthorised 25% withdrawal charge and £450k house price cap – the TSC noted both as areas of focus for the government to review, acknowledging unauthorised withdrawals results in losing a portion of owned savings. (Conclusion, Paragraph 33,46)

Our take:

  • In 2024, emergencies were the leading reason for LISA savers making unauthorised withdrawals (Moneybox Lifetime ISA research, January 2025), so reducing this penalty alone could remove a significant barrier to saving and encourage more young people to open and stay invested in a LISA.
  • We firmly believe that by committing to an annual review of the Lifetime ISA price cap in line with house price inflation will ensure it’s fit for purpose for the next generation of aspiring homebuyers.

When it comes to retirement saving with the LISA, the TSC states – “The available evidence indicates that saving for retirement with a Lifetime ISA is working well for self-employed people.” (Conclusion, Paragraph 87) and “could provide a very useful and superior third pillar for basic rate and self-employed taxpayers”. (Page 35, Paragraph 81).

Our take:

  • We continue to believe that the LISA also plays an important role in supporting young people to prepare for retirement, so we were pleased to see that the TSC acknowledged the role that the LISA can play in this area, especially for those who are self-employed.

What’s next?

  • This report is not a decision – only recommendations and guidance. HM Treasury will consider the TSC’s report ahead of the Autumn Budget, where any changes may be confirmed.
  • Until then, the LISA works the same as always, with its government bonus and withdrawal penalty unchanged for now. If HM Treasury decides to make any changes to the LISA, it’s likely this will be announced at the Autumn Budget.

As always, we’ll keep our community informed every step of the way forward. We’ll continue our conversations with the government and Treasury ahead of the Autumn Budget, showcasing how they can build on the solid foundation already in place and future-proof a product that is delivering real, measurable impact for people nationwide.

 

*HMRC data