Summary
Members of Parliament (MPs) in the UK have criticized the current format of Lifetime Individual Savings Accounts (LISAs), saying they need further reform. They argue that LISAs may not be suitable for everyone and are expensive for the government, costing an estimated £3 billion over five years. The government's response to previous concerns has been deemed insufficient by the Treasury Committee.
Key Facts
- Lifetime ISAs (LISAs) are accounts for people under 40 to help save for retirement or buying a first home.
- People can save up to £4,000 each year in a LISA, and the government adds a 25% bonus to the savings.
- MPs on the Treasury Committee believe LISAs are not effectively reformed and could be unsuitable for some.
- LISAs launched in 2017, but only about 6% of eligible adults have opened one.
- A study found that 87% of those using LISAs for home buying could have done so without the account.
- MPs question if LISAs are a good use of taxpayer money, given their high cost to the government.
- The committee also noted that LISA savings could affect eligibility for benefits like universal credit.
- The government has expressed intentions to work with industries to improve how LISAs are explained, especially regarding impact on benefits.
