The Lifetime ISA is “delivering on its original purpose” but its full potential is yet to be realised, says Moneybox.
In response to the Treasury Committee’s recent report which found that LISAs are in need of reform, Moneybox said the product was doing what it originally intended; helping young people save and invest earlier in life towards their first home and retirement.
However, it acknowledged that a “few simple updates” to the product rules, which have not been reviewed since its launch in 2017, could help more young people to benefit in the years ahead.
Research from HM Revenue and Customs recently found that two fifths (42%) of those not currently holding a LISA would be most likely to open one if the rules were changed so that original savings were not lost when paying the withdrawal charge.
Moneybox said there is also a strong case for committing to an annual review of the property price cap to ensure it keeps pace with changing market conditions.
Brian Byrnes, head of personal finance at Moneybox, said: “We’ve seen first-hand just how invaluable this product has been in helping hundreds of thousands of young savers build positive saving and investing habits early in life and buy their first home far sooner than would otherwise have been possible.
“We remain committed to working closely with the Government to champion the needs of aspiring first-time buyers and younger generations nationwide.”
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