The BSA has published its response to the Treasury Committee's Call for Evidence on the Lifetime ISA (LISA).

We support the Government’s aims for the LISA: to help first-time buyers save for a deposit and encourage long-term saving for retirement. The challenges faced by many to buy their first property or enter retirement with a sufficient financial buffer are well understood. We therefore welcome initiatives that help people overcome these challenges. However, the way the LISA operates today is not effective: its existing rules are unfairly punitive, its limits too restrictive, and its terms too complex to meet its objectives.

Retaining the LISA’s name and objectives but making some simple yet crucial changes to its rules would make it fairer, easier to understand, and a more attractive option for consumers and financial services providers – increasing take-up and allowing the LISA to fulfil its intended purpose as a realistic option for lifetime savers.

Our recommendations for reform include:

• reducing the withdrawal penalty to 20% to prevent people from losing any of their own funds
• increasing the property price cap from £450,000 in line with increased house prices
• raise and equalise the Help to Buy ISA threshold in line with LISA
• remove the 12-month rule

You can find our full response here.