Our role as mortgage brokers is not to advise on savings: we know enough about Lifetime ISAs to do our job well but will never tread into the realms of savings advice for fear of seeming as if we are specialists in this area. What we can say is that we see clients’ Lifetime ISAs being utilised to buy their first home that requires a mortgage, which is not surprising as it enables anyone under 40 to save up to £4,000 a year and the government will top it up by 25%. 

In a BBC article published last month entitled, ‘Excellent or awful - why Lifetime ISAs divide opinion’, real life experiences shed some light on different people’s experiences of the savings product. For one person named, it was an “excellent product," says Liam, now aged 28. "The government paid £4,000 towards my first home." Buying a two-bed house as his first property, the LISA closed down after he had utilised his full savings and the government uplift as his deposit, and then opened a second as a means to save for later life. Conversely, a different person’s experience was one of frustration as they too had a LISA for the purpose of buying their first home, but from the time it was set up to the point of wanting to buy a house, the person’s was buying with a partner and able to afford a property that was over the £450,000 limit. This meant they were not able to release the well-needed funds for the purpose of a deposit. 

It is no surprise that a product that includes an uplift from the government comes with certain conditions: 

 

 

Increasing house prices since 2017 may have caught people out on the threshold limit, therefore suggestions are made in the BBC article for the product to take in to account inflation, ease on the penalty and consider extending the maximum age to open an account. 

 

All of which provides the government with future food for thought.