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HM Revenue and Customs data reveals that approximately 45,000 Lifetime ISA (Lisa) savers were penalized with unauthorised withdrawal charges more than once in the tax year 2024-25. The average penalty for these repeated infractions was about £760 per saver, though some individuals faced much higher charges, up to £11,000 for the top 25 cumulative penalties. The article highlights concerns over the restrictive nature of Lisa rules and the significant financial impact on savers who need access to their funds outside the intended purposes.
Written locally by qwen2.5:14b on 2026-10-08,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
Story summary
In 2024–25, HM Revenue and Customs (HMRC) revealed that approximately 45,000 savers with Lifetime Isas (Lisas) were hit with unauthorised withdrawal charges more than once. Money app Plum obtained this information through a freedom of information request. The average penalty for these repeated offences was around £760 per person in the tax year 2024-25. A small group of about 60 savers faced charges totaling over £8,000, while another set of approximately 60 individuals incurred charges between £7,000 to £7,999. The most frequent charge range for those penalized multiple times was up to £999, affecting around 33,530 savers. HMRC also reported that the average of the top 25 cumulative penalties per individual who faced repeated charges within the same tax year was about £11,000. These charges are levied at a rate of 25% when withdrawals are made for purposes other than purchasing a first home or upon reaching age 60.
Written for “Lifetime Isa Withdrawal Charges” on 2026-10-08,
grounded in this article and the 0 other(s) covering the same event.
Why this leaning score
The article's own words the score was based on. Each is quoted
verbatim and was checked against the article text before being
stored, so you can find it in the original.
Leaning: leans left for article 64307 (high confidence, 1 verified quote) · logged 2026-10-08
Around 45,000 Lifetime Isa (Lisa) savers were hit with unauthorised withdrawal charges more than once in 2024–25, according to HM Revenue and Customs (HMRC) figures.
uncertain
savers → hit → figures
The figure, which was rounded to the nearest 100, was obtained by money app Plum following a freedom of information (FOI) request.
asserted
which → round → request
HMRC’s response showed the average saver who was penalised more than once in this way in 2024-25 lost around £760 that year.
asserted
who → show → 760
Around 60 savers faced charges adding up to £8,000-plus in the tax year 2024-25, while around 60 others incurred charges of £7,000 to £7,999.
asserted
others → face → 7,999
The most common charge bracket, among those hit with charges multiple times, was for charges of up to £999.
asserted
bracket → hit → 999
Asked by Plum about the average of the top 25 cumulative penalties per individual who was penalised more than once within the same tax year, HMRC said this was £11,000 in 2024-25, rounded to the nearest £100.
asserted
this → ask → 100
A 25% bonus is added to savings, up to a maximum of £1,000 per year.
But a charge of 25% can apply of someone makes an unauthorised withdrawal, which may happen in cases where someone is aged under 60 and not withdrawing the money for their first home.
uncertain
someone → add → home
Rules around Lifetime Isas have previously been criticised for being too restrictive, for example, the first home must cost £450,000 or less.
asserted
home → criticise → 450,000
Figures previously released by HMRC in September show £118,985,000 in withdrawal charges was recorded for Lifetime Isas in 2025-26.
asserted
118,985,000 → release → 2025
Read More
Some 154,100 people made unauthorised withdrawals in that year.
asserted
people → read → year
Lifetime Isas launched in 2017.
asserted
Isas → launch → 2017
A Government consultation seeking views on the design and implementation of a new first-time buyer Isa closed in August 2026.
asserted
consultation → seek → August
The new product will be focused on those buying a first home, with the dual purpose of the Lifetime Isa having previously been criticised.
asserted
purpose → focus → Isa
Once available, the new product will be offered in place of the Lifetime Isa, but it is still possible to open a Lifetime Isa until the new product becomes available and, beyond that, account holders can keep saving into Lifetime Isas.
asserted
holders → offer → Isas
Rajan Lakhani, a personal finance expert at Plum, said: “What the data shows will anger many and focus minds on ensuring the new first-time buyer Isa is fit for purpose.”
asserted
Isa → say → purpose
He added: “These are significant sums of money for first-time buyers who already face considerable obstacles to getting a foot on the housing ladder.”
asserted
who → add → ladder
Maike Currie, vice president of personal finance at PensionBee, said: “These figures expose a fundamental flaw in the Lifetime Isa.
asserted
figures → say → Isa
“The Government gives you a 25% bonus for saving, but if life gets in the way, the withdrawal charge can claw back the bonus and take a slice of your own savings too.”
asserted
charge → give → savings
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