Rachel Reeves<\/a> unveiled proposals to replace the LISA with a “new, simpler” savings product aimed at helping first-time buyers. Consultations are scheduled for 2026, though the introduction date remains uncertain.<\/p>\nMr Lewis strongly advised anyone over 18 but under 40 who has not yet opened a LISA to do so without delay. He stated: “If your age is between 18 and 40 and you do not have a Lifetime ISA or a Help to Buy ISA, I would suggest you open one and put a pound in one now. That’s because the government has announced the Lifetime ISA is to be replaced by a new first-time buyer’s savings product.<\/p>\n
“We don’t know exactly what it is; my guess is it will open in April 2028. It will be a relatively simple product where you save in it and you get a bonus, and unlike the Lifetime ISA, you won’t be able to use it to save for your older age savings once you’re aged over 60.<\/p>\n
“So why, even though the Lifetime ISA is likely to be a defunct product at some point in the future, am I suggesting you put a quid in it? Two reasons. First of all, with the Lifetime ISA, in order to use it to get the 25% bonus-you can put up to \u00a34,000 a year, so the bonus is \u00a31,000 on that-as a first-time buyer on a property under \u00a3450,000, you have to have had it open for a year.<\/p>\n
“So getting a pound in means it’s open and then you have the facility available if you need it. So if in a year’s time you suddenly were in a position you could buy a house, you could dunk \u00a34,000 in the Lifetime ISA and get the \u00a31,000 bonus and use it then, because it’s been open a year.<\/p>\n
“The second reason is because the Lifetime ISA can be used for retirement savings. Now, it’s important to understand for most people your workplace pension is better because they’re contributing too, but the LISA can be a useful facility in some circumstances. So for the sake of a quid, putting a quid in to give yourself the facility of having a Lifetime ISA to save for your retirement if it becomes worthwhile in future is a good idea.<\/p>\n
“Now, I don’t even know if you will still be able to use it to save for retirement once they introduce a new product, but it’s possible you may be. So my point is, putting a quid in a savings product is not a particularly big cost to give you the facility in case you need it in the future and if the worst comes to the worst, you’d be able to take the pound out for just a 6.25% penalty, so you’d lose 6p.”<\/p>\n
The penalty mentioned refers to the 25 per cent withdrawal charge applied to unauthorised withdrawals. Should you choose to withdraw your entire pot, a 25 per cent fee will be levied on the total sum in your ISA, including the Government bonus.<\/p>\n
This has remained a longstanding point of contention regarding the LISA, with widespread expectations that the Chancellor’s newly announced product will tackle this issue.<\/p>\n
Additional concerns centre on the existing \u00a3450,000 first-time buyer property price ceiling. Many argue that, given escalating house prices, this threshold is inadequate – particularly for purchasers in London and other metropolitan areas.<\/p>\n
During the previous Budget, Ms Reeves also revealed a reduction to the annual Cash ISA allowance for those under 65, lowering it from \u00a320,000 to \u00a312,000 from April 2027 to promote greater investment.<\/p>\n
It is understood that this will not impact the amount available for investment through a stocks and shares ISA. Funds deposited into your LISA presently count towards your \u00a320,000 ISA threshold.<\/p>\n","protected":false},"excerpt":{"rendered":"Martin Lewis urged people to act now (Image: Getty) Martin Lewis has issued an urgent warning to individuals…\n","protected":false},"author":2,"featured_media":732502,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,4951,1059,940,3125,2499,619,16,15],"class_list":{"0":"post-732501","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-isa","11":"tag-martin-lewis","12":"tag-money-saving","13":"tag-money-saving-expert","14":"tag-personal-finance","15":"tag-rachel-reeves","16":"tag-uk","17":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115988437636334404","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/732501","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=732501"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/732501\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/732502"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=732501"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=732501"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=732501"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"Martin](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2026\/01\/GettyImages-951394142-1-6709809.jpg\" "\\"Martin")
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