Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she will exempt Lifetime ISA account holders from the withdrawal charge that can no longer purchase a house due to a significant change of personal circumstances.

The Lifetime ISA is intended to support saving for a first home or later life, and the withdrawal charge helps ensure that Government support is used for those purposes. Introducing exemptions based on individual circumstances would undermine the LISA’s objectives. It would also require judgements about which circumstances should qualify and increase complexity for both savers and providers.

However, the Government is currently consulting on a new First Time Buyer ISA, which would pay Government bonus at the point a saver purchases their first home. This would remove the need for a withdrawal charge and allow savers to withdraw their own contributions should their circumstances change. The consultation was published 23 June 2026 and can be found here: First Time Buyer ISA consultation - GOV.UK.