The Treasury Committee has begun considering whether Lifetime Personal Savings Accounts are “fit for purpose”.
The investigation is seeking evidence to question whether the financial product, first introduced in 2016, continues to be an “appropriate financial product”. 
Former Chancellor George Osborne introduced LISA in his Budget nine years ago to provide an alternative way to save money for retirement tax-free, while also providing incentives for people under 40 to get on the property ladder. encouraged people to save for housing. .
The product allows people under 40 to open a LISA and deposit up to £4,000 each year until they turn 50. At the end of each tax year, HMRC will add a 25% bonus.
Savers can only withdraw money from their account if they are buying a home for the first time, have a terminal illness with less than 12 months to live, or are over 60 years old. Withdrawals for other reasons are subject to a 25% fee.
The committee, led by Dame Meg Hillier, will seek input from the financial industry, consumers and professionals as it carries out its review.
Brian Burns, head of personal finance at Moneybox, said he welcomed the committee's review of what he called a “great product”.
Moneybox, which claims to be the UK's largest LISA provider, adds: “Recent HMRC data shows that more than 1.5 million people across the country are currently saving with a LISA.
“Last year alone, we saw a 34% increase in customers opening LISAs with Moneybox, a product that has become a real lifeline for thousands of first-time buyers who have done it all in recent years. This shows that there is a growing demand for the product and that it will be able to survive the difficult market environment. ”
The committee set out 10 important questions to ask about the product.
Is the Lifetime ISA fit for purpose in its current design, such as a combination product for buying a house and pension savings? How well does the transition between using the Lifetime ISA as a product for the government and its use as a product for the government? Given its policy objectives, are Lifetime ISAs good value for money for governments? Is the Lifetime ISA an appropriate pension savings product? Should the Lifetime ISA be abolished? Should the Lifetime ISA be reformed to remove withdrawal penalties? The Lifetime ISA should be limited to those who cannot access a workplace pension Should you? Should the lifetime ISA house value cap be increased in line with inflation or should it be removed? Should the annual limit for a Lifetime ISA be increased from £4,000? Should it be reformed?
Submissions to the committee must be sent by February 4th.
