OneFamily has called on the Government to reform the Lifetime ISA (LISA) scheme ahead of the Autumn Budget, urging changes to help first-time buyers struggling with affordability.
The LISA provider pressed for an increase to the £450,000 property price cap, which has remained unchanged since the product’s launch in 2017, arguing it should rise in line with house price growth.
The firm also called for an adjustment to the current withdrawal penalty, which it says is discouraging potential savers.
In a recent survey of 2,000 UK adults aged 18 to 40, OneFamily found that 41% of those without a Lifetime ISA – equivalent to around 7.1 million people – would be more likely to open one if the property price cap was increased.
The research also showed that the penalty deters roughly one million people from taking out a LISA.
Jim Islam, CEO of OneFamily, said: “Hopeful first-time buyers are facing enormous challenges. High property prices, rising rents, and the increased cost of living are making it harder than ever to save for a deposit. The Lifetime ISA offers a vital lifeline, giving savers a 25% government bonus that can make a real difference.
“We’ve seen the positive impact LISAs can have on young people’s lives first-hand – in the 2024/25 financial year alone, it helped nearly 90,000 people buy their first home.
“But given the scale of the difficulties they face, it’s clear that more needs to be done. We’re calling for the withdrawal penalty to be adjusted and for the £450,000 property price cap – unchanged since 2017 – to be increased.
“These changes are the right thing to do and would support people in taking that crucial first step onto the housing ladder.”
