LISA: should I pay 25% to withdraw?

Hi all

I took out a LISA smartly thinking it was the best way to save to buy my first home. However, circumstances changed and I'm now buying a house with my sister and her partner.

We're buing a house worth more than £450k (we're in London), meaning I can't use my LISA savings for the house purchase.

I'm trying to work out if it's better to leave the money in there until I'm 60 (I'm 34), or should I withdraw it all now and pay the 25% penalty (amounting to almost £800 of my own money)? 

For context, I have a workplace pension. About 2/3 of my savings are in the LISA.

Thanks for any advice!


  • edited 12 February 2022 at 1:53PM
    AlexlandAlexland Forumite
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    edited 12 February 2022 at 1:53PM
    If you partially withdrew 80% of the LISA for the property purchase the penalty would be equal to the bonus and then you could invest the remaining 20% until age 60+ by transferring to a S&S LISA and maybe add more in future tax years to start earning bonuses again...
    But then if you can afford the property without raiding the LISA or needing the money before 60 then maybe just transfer it all to a S&S LISA.
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