MSE News: Martin Lewis: Is a Lifetime ISA win coming in the Budget?

Oasis1

It sounds like there's a lot of potential changes on the table. Hoping they adjust the £450k limit by inflation, remove 6.25% penalty for withdrawing in some or all circumstances (if they don't, they should remove it from means testing for UC) and make it more attractive for banks to offer the product (e.g. reducing complexity etc) in hope that more competition means better rates for savers.

Also - if they do find that it's mainly wealthy people who could afford to purchase property anyway, at a significant cost to the tax payer, then work needs to be done to reduce that and improve accessability for the people who genuinely need it.

MeteredOut

Oasis1 said:

It sounds like there's a lot of potential changes on the table. Hoping they adjust the £450k limit by inflation, remove 6.25% penalty for withdrawing in some or all circumstances (if they don't, they should remove it from means testing for UC) and make it more attractive for banks to offer the product (e.g. reducing complexity etc) in hope that more competition means better rates for savers.

Also - if they do find that it's mainly wealthy people who could afford to purchase property anyway, at a significant cost to the tax payer, then work needs to be done to reduce that and improve accessability for the people who genuinely need it.

How do they differentiate between someone who can afford a £450K house and is wealthy and someone who can afford a £450K house but who genuinely needs the additional support?

fistfulofsteel

I'm currently preparing to buy my first home (from a relative). I have enough money to buy in cash, but as I'm unlikely to have much income going forward I'd like to not have money tied up in a LISA preventing me from claiming UC. I could try to get a minimal mortgage purely to unlock the LISA , but with very little income it seems unlikely. Would it be worth trying to put off the purchase to see whether and how the LISA rules will be revised?

masonic

fistfulofsteel said:

I'm currently preparing to buy my first home (from a relative). I have enough money to buy in cash, but as I'm unlikely to have much income going forward I'd like to not have money tied up in a LISA preventing me from claiming UC. I could try to get a minimal mortgage purely to unlock the LISA , but with very little income it seems unlikely. Would it be worth trying to put off the purchase to see whether and how the LISA rules will be revised?

Delaying your purchase is likely to be more costly than simply exiting the LISA and paying the 6.25% net penalty. Of course you wouldn't need to do that immediately or all at once, so if the penalty is reduced or LISAs are eventually converted to ISAs you may avoid it.

Perhaps you won't need to claim UC and reach the age of 60 where you could withdraw penalty free under the current rules. Stranger things have happened.