Unloved LISA?

If benefits are otherwise withdrawn, a 25% penalty applies, e.g., a £5,000 fund delivers a net £3,750 to the LISA owner.

Among the points made by the experts, one that drew common criticism was that the 25% withdrawal charge does more than claw back the government uplift. During the pandemic, the charge was temporarily reduced to 20% (effectively matching the uplift) and there was a consensus that the post-Covid reversion to 25% was an error.

There was less agreement on the suitability of LISAs as replacements for other forms of retirement planning, a reminder that if you are considering a LISA then advice should always be taken. 

Tax treatment varies according to individual circumstances and is subject to change.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

The Financial Conduct Authority does not regulate tax advice.

The value of your investment and any income from it can go down as well as up and you may not get back the full amount you invested.

Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.