There is also a charge of 25% for withdrawing the money for any reason other than buying a first home or because the saver has reached the age of 60 or over, unless the saver is terminally ill. Mr Lewis told the committee: “Many people think that if you add 25% and take off 25% you get back to where you started.
He told the MPs: “You can see why, when the huge majority of the population should always be saving first in a pension, that the banks, with all the mis-selling campaigns… that the banks have gone, we just don’t want to touch this, because we’re going to get people telling us they used it for retirement savings and in 20 years they’ll say you should have told me to get a pension.”.
He said: “We have a succession of young people who are saving in the vehicle they have been encouraged to save in by the state, who are then trying to use their savings to buy a first-time property, but due to house price inflation their property has just tripped above the £450,000 level.
Mr Lewis also highlighted the static £450,000 house purchase cap, which can put people off saving into a Lisa in the first place.
I would say no employee unless they’ve maxed out their auto-enrolment, because that smacks the pants off the Lifetime Isa for retirement savings, no higher or top-rate taxpayer, because the tax benefits on pensions are way better than the Lifetime Isa.”.
