Lifetime ISA penalties sting more than 150,000 savers

Triggered almost £119m in withdrawal charges

clock • 2 min read

Tens of thousands more Lifetime ISA savers paid a penalty to access their money than successfully used the product to buy a home, according to the latest official statistics.

The number of people making unauthorised withdrawals in the tax year 2025/26 hit 154,100 and triggered almost £119m in withdrawal charges.  This compares to a record 99,750 people who used a LISA to purchase their first home – a difference of more than 50,000 people stung by the exit charge. The average unauthorised withdrawal was just £3,088. Quilter tax and financial planning expert Rachael Griffin said this suggested many of those making unauthorised withdrawals "are savers who started putting money aside for a home before finding their circumstances had changed and now need acc...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on ISAs

Beyond 'patronising' narratives: Culture and circumstance as gender ISA gap drivers

Beyond 'patronising' narratives: Culture and circumstance as gender ISA gap drivers

Caring responsibilities often mean women have less left to put aside

Sophia Panayi
clock 11 August 2026 • 3 min read
Investment ISA cash interest changes: Yet more stick, no carrot

Investment ISA cash interest changes: Yet more stick, no carrot

'These measures fail to recognise that cash is used intentionally by savers as a strategic asset'

Kate Toumazi
clock 15 July 2026 • 4 min read
ISA reforms: Complexity risks undermining government's investment ambitions

ISA reforms: Complexity risks undermining government's investment ambitions

Government plans put ISA simplicity under threat

Andrew Tully
clock 14 July 2026 • 4 min read