In the first financial year, 2017-18, there was no unauthorised withdrawal charge in place. The data for 2018-19 is obviously not yet known, but HMRC will publish it when it is available.
Will the Minister look at the effect of the withdrawal charge more closely? A first-time buyer has told me that he has found a home that suits his needs, but because his lifetime ISA is less than a year old, he will not only lose his government bonus but have to pay a £375 penalty charge back to the Government out of his own money. Why are aspiring homeowners being penalised in this way?
I am of course happy to look at that case. Following my appearance at the Treasury Select Committee, I asked my officials to look at the guidance on the website, as I am anxious not to put misleading advice on there. The LISA is available for long-term savings. That was the scheme’s objective when it was set up.
I am pleased the Minister just mentioned his appearance before the Select Committee, where we explored the issue of the 25% charge and the fact that a further 6% of capital can also be lost. Will he update us? He has talked to officials about looking at the website. Will he ensure that the Treasury website is fully compliant with Financial Conduct Authority rules applicable to firms in the private sector?
I am taking this up further, but I am concerned not to put a misleading flat-rate percentage on there, given that most savers who make an unauthorised withdrawal will pay a different amount according to their circumstances.
We have junior ISAs, cash ISAs, stocks and shares ISAs and lifetime ISAs. Will the Minister consider simplifying the entire ISA system to help young people in particular with long-term, cost-effective saving?
The Government have developed a range of savings products and incentives, or encouraged providers to do so, to reflect the range of needs. We have also raised the ISA allowance to £20,000 and introduced the personal savings allowance, meaning that 95% of people do not pay any tax on their savings income. It is important that we have that range of options for all age groups.