Source: United Kingdom UK Parliament (video statements)
Martin Lewis and Moneybox to give evidence on Lifetime ISA.
The Treasury Committee will hear from experts and industry voices including Martin Lewis, Moneybox and Skipton Building Society as it holds the first session of its inquiry into the Lifetime ISA (LISA) on Wednesday 26 February.
In the first part of the session, MPs will hear from a panel of experts as they examine how beneficial using a LISA currently is for consumers. This will be followed by a panel of industry representatives who will explore the current approach to the LISA and how this may be improved.
The LISA was first announced by the then-Chancellor, Rt Hon George Osborne, in 2016. It allows first-time buyers and those saving for retirement to benefit from a tax-free savings account which the Government then tops up with a bonus of 25% (up to a limit of £1000 a tax year). However, since its introduction the product has faced widespread criticisms, with some claiming the design is overcomplicated and questioning if it truly provides value for money for taxpayers.
MPs could explore these issues as they question if the LISA in its current form is serving its intended dual purpose for first-time buyers and as a retirement savings tool. The Committee may also examine if the current withdrawal penalty acts as a sufficient deterrent, given that £75mn in penalties were issued during the 2023-24 tax year.
In the years since the LISA was introduced average house prices have increased significantly, with figures varying drastically by region. MPs could question if the current £450,000 price cap should be re-examined and may consider what, if any, role house price inflation should play in setting the cap. The Committee may also consider the risks involved for those using the LISA as a retirement savings tool.