Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she has made an assessment of the potential merits of updating guidance on the lifetime ISA scheme to clarify the cost of early withdrawal penalties.

Answered by Emma Reynolds - Economic Secretary (HM Treasury)

The Lifetime ISA supports younger people saving for their first home or later life by offering a generous government bonus on up to £4,000 of savings each year. These funds, including the government bonus, can be used to purchase a first home up to the value of £450,000, in the case of terminal illness or from age 60.

Any other withdrawals are subject to a 25% charge on the amount withdrawn. This recoups the government bonus, any interest or growth arising, and a proportion of the individual’s subscriptions to discourage such withdrawals and protect the long-term nature of the account.

While the Government’s website ‘gov.uk’ already explains the rules behind the Lifetime ISA, and includes a worked example of the withdrawal charge, we will consider whether any improvements can be made to that guidance.

Lifetime ISA managers also have a responsibility for ensuring that communications with their customers are clear and concise as part of consumer duty requirements. As part of that communication the manager will normally provide details of the scheme, including the rules around withdrawing funds, whether any charge applies and how that charge is calculated.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions she has had with social media and telecommunication companies on reducing Authorised Push Payment Fraud on online platforms.

Answered by Emma Reynolds - Economic Secretary (HM Treasury)

The government is committed to ensuring that all key sectors play their part to better protect the public and businesses from fraud.

In November, building on existing pledges to prevent fraud, the Home Secretary, the Secretary of State for Science, Innovation and Technology and the Chancellor wrote to signatories of the Online Fraud Charter and Telecommunications Fraud Sector Charter calling for technology platforms and telecoms providers to go further and faster in their efforts to tackle the fraud that exploits their services.

The government will publish a fraud prevention strategy in due course, which will ensure a unified and coordinated response from government, law enforcement and industry.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent discussions she has had with the Prudential Regulation Authority on the potential merits of changes to the Financial Services Compensation Scheme deposit protection limit.

Answered by Emma Reynolds - Economic Secretary (HM Treasury)

Eligible deposits held by UK banks, building societies and credit unions that are authorised by the Prudential Regulation Authority (PRA) are protected by the Financial Services Compensation Scheme up to £85,000. The PRA sets this limit and is required to independently review the limit every five years.

On 31 March, the PRA launched a consultation on the outcome of its most recent review and proposed an inflation-based increase in this limit to £110,000. Any changes to the limit must be approved by the Treasury and the Government would carefully consider any changes proposed by the PRA following the conclusion of this consultation.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what estimate she has made of the annual cost to the Exchequer of the Lifetime ISA in terms of (a) reduced tax revenue and (b) value paid bonus payments in (i) 2024–25 and (ii) 2025–26.

Answered by Emma Reynolds - Economic Secretary (HM Treasury)

The cost of the tax relief element of the Lifetime ISA is included within tax relief cost of all ISAs, which can be found in the Non-structural tax relief statistics publication, specifically table 5.16.

A forecast of estimated bonus paid is published within the OBR’s Economic and fiscal outlook, in the ‘detailed forecast tables: expenditure’ table. Specifically, this can be found within the detailed table breakdown in tab 4.11, row 7.

Links:

https://www.gov.uk/government/statistics/main-tax-expenditures-and-structural-reliefs/non-structural-tax-relief-statistics-december-2024

https://obr.uk/efo/economic-and-fiscal-outlook-march-2025/

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether her Department has made an assessment of the potential merits of increasing the the Financial Services Compensation Scheme deposit protection limit for registered businesses.

Answered by Emma Reynolds - Economic Secretary (HM Treasury)

Eligible deposits held by UK banks, building societies and credit unions that are authorised by the Prudential Regulation Authority (PRA) are protected by the Financial Services Compensation Scheme up to £85,000. This limit is set by the PRA and applies to eligible retail accounts as well as accounts of eligible registered businesses. The PRA is required to independently review the limit every five years.

On 31 March, the PRA launched a consultation on the outcome of its most recent review and proposed an inflation-based increase in this limit to £110,000. Any changes to the limit must be approved by the Treasury and the Government would carefully consider any changes proposed by the PRA following the conclusion of this consultation.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what information her Department holds on usage of the Lifetime ISA by region; and if she will make an assessment of the potential impact of the Lifetime ISA price cap on prospective first-time buyers in each region.

Answered by Emma Reynolds - Economic Secretary (HM Treasury)

At the request of the Treasury Select Committee, HMRC recently released regional data on the Lifetime ISA.

HMRC Letter to Treasury Select Committee

Data from the latest UK House Price Index shows that while the average price paid by first-time buyers has increased, it is still below the LISA property price cap in all regions of the UK except for London, where the average price paid is affected by boroughs with very high property values.

The Government keeps all aspects of savings tax policy under review.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the readiness of the Financial Conduct Authority to (a) implement and (b) enforce the proposed regulatory regime for cryptoassets by the proposed commencement date.

Answered by Emma Reynolds - Economic Secretary (HM Treasury)

HM Treasury has engaged closely with the Financial Conduct Authority in developing the future financial services regulatory regime for cryptoassets and the FCA published its discussion paper shortly after HM Treasury published its draft legislation. The FCA has also published a roadmap setting out their preparation in advance of the regime going live.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she plans to make an assessment of the potential impact of new regulated activities for cryptoassets on (a) UK-based and (b) overseas firms offering services to UK consumers.

Answered by Emma Reynolds - Economic Secretary (HM Treasury)

HM Treasury will publish a full impact assessment alongside its final legislation.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether qualifying stablecoin issuers will be subject to (a) capital and (b) liquidity requirements under the provisions in the draft Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025.

Answered by Emma Reynolds - Economic Secretary (HM Treasury)

The Government’s forthcoming regime for cryptoassets will provide the Financial Conduct Authority with the necessary powers for effective regulation of cryptoassets, including the ability to set prudential capital and liquidity requirements for UK stablecoin issuers and other regulated cryptoasset service providers.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she is making an assessment through the Pensions Investment Review of the potential merits of mandating pension fund providers to invest in British stocks and shares.

Answered by Torsten Bell - Parliamentary Secretary (HM Treasury)

The Interim Report of the Pensions Investment Review was published in November 2024 and included a number of proposals to reform the UK pension system, delivering fewer, larger pension schemes or ‘megafunds’ better able to deliver for savers and better positioned to invest productively.

Throughout the review process, we have taken the approach of working with the pensions industry to improve saver outcomes and increase investment in UK markets. The final report of the Pensions Investment Review will be published in the coming weeks, ahead of the introduction of the Pension Schemes Bill during this parliamentary session.

Found: Greg Smith Carolyn Harris Dame Harriett Baldwin Afzal Khan Rosie Duffield Danny Kruger Mark Garnier

Found: Greg Smith Carolyn Harris Dame Harriett Baldwin Afzal Khan Rosie Duffield Danny Kruger Mark Garnier

Found: Greg Smith Carolyn Harris Dame Harriett Baldwin Afzal Khan Rosie Duffield Danny Kruger Mark Garnier

Found: Greg Smith Carolyn Harris Dame Harriett Baldwin Afzal Khan Rosie Duffield Danny Kruger Mark Garnier

Found: Greg Smith Carolyn Harris Dame Harriett Baldwin Afzal Khan Rosie Duffield Danny Kruger Mark Garnier

Found: Greg Smith Carolyn Harris Dame Harriett Baldwin Afzal Khan Rosie Duffield Danny Kruger Mark Garnier

Found: Greg Smith Carolyn Harris Dame Harriett Baldwin Afzal Khan Rosie Duffield Danny Kruger Mark Garnier

Found: Greg Smith Carolyn Harris Dame Harriett Baldwin Afzal Khan Rosie Duffield Danny Kruger Mark Garnier

Found: On this day, Mark Garnier MP will participate on an FMB podcast on licensing.