Unauthorised Lifetime ISA Withdrawals Hit 129,200 as London's £450,000 Cap Triggers Saver Penalties
Updated
Updated · BBC.com · Jun 4
Unauthorised Lifetime ISA Withdrawals Hit 129,200 as London's £450,000 Cap Triggers Saver Penalties
3 articles · Updated · BBC.com · Jun 4
Summary
129,200 UK savers made unauthorised Lifetime ISA withdrawals in 2024-25, exceeding the 87,250 who used the accounts for a home purchase.
London's £450,000 property cap is a key pressure point: average first-time buyers now pay £463,000, and BBC analysis found median LISA users could afford the average flat in only 16 of 33 boroughs.
The 25% withdrawal charge means savers lose 6.25% of their own money if they pull funds out, leaving some buyers trapped between paying a penalty and keeping savings locked up until age 60.
London buyers described that squeeze in practice: one couple bought a £521,000 Tower Hamlets flat after losing £3,500 on a withdrawal, while another saver has £50,000 stuck in his LISA.
HMRC collected about £102 million from early or unauthorised LISA withdrawal charges in 2024-25, as campaigners called for the penalty to be scrapped and the cap raised with house prices.