Oral Answers to Questions

Debate between Justin Madders and John Glen

Tuesday 22nd May 2018 Commons Chamber

[Justin Madders (Ellesmere Port and Neston) (Lab)]

5. How many people have paid a 25% withdrawal charge to use their lifetime ISA savings since that scheme was established.

[The Economic Secretary to the Treasury (John Glen)]

In the first financial year, 2017-18, there was no unauthorised withdrawal charge in place. The data for 2018-19 is obviously not yet known, but HMRC will publish it when it is available.

[Justin Madders]

Will the Minister look at the effect of the withdrawal charge more closely? A first-time buyer has told me that he has found a home that suits his needs, but because his lifetime ISA is less than a year old, he will not only lose his Government bonus but have to pay a £375 penalty charge back to the Government out of his own money. Why are aspiring homeowners being penalised in this way?

[John Glen]

I am of course happy to look at that case. Following my appearance at the Treasury Select Committee, I asked my officials to look at the guidance on the website, as I am anxious not to put misleading advice on there. The LISA is available for long-term savings. That was the scheme’s objective when it was set up.