- HMRC data shows LISA holders lost nearly £119m in unauthorised withdrawal charges between April 2025 and March 2026, with 154,100 people losing an average of £3,088 each.
- Unauthorised withdrawals exceeded authorised home purchase withdrawals for the fourth consecutive year, despite a record 99,570 people using their LISA to buy a first home.
- The scheme's £450,000 property value cap has remained frozen since 2017, forcing many savers to pay penalties as UK house prices have risen significantly.
- The 25 per cent charge on total balance withdrawals leaves savers facing an effective 6.25 per cent penalty beyond losing government top-ups.
- The government plans to launch a new First-Time Buyer ISA to replace LISAs and remove the punitive withdrawal penalty.
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