London, UK – Moneybox, the largest provider of the Lifetime ISA (LISA) in the UK has today issued an open letter urging the Chancellor to avoid costly policy theatre by building on the success of the LISA rather than replacing it. The Lifetime ISA has already helped more than 300,000 first time buyers onto the property ladders across the UK since it launched in 2017.

The call comes as the Government prepares to consult on potential changes to first-time buyer support, including the introduction of a new product from 2028. Moneybox warns that replacing the LISA risks reintroducing challenges that the LISA was designed to address, while adding complexity for the over 1.5 million consumers using it to save for a first home or retirement.

The letter sets out the case for targeted reforms to strengthen the existing product—such as reviewing the property price cap and withdrawal rules—while maintaining its core benefits. The key asks are:

  1. Retain the LISA for new customers, rather than introducing a replacement product
  2. Commit to an annual review of the house price cap to ensure it keeps pace with market conditions
  3. Reform the withdrawal penalty by reducing to 20% so that savers are not unfairly penalised

Brian Byrnes, Director of Personal Finance at Moneybox, said: “The evidence shows the LISA is working for the vast majority of users, supporting consistent saving and better long-term financial outcomes. With over 1.5 million active savers relying on it, a consultation risks adding unnecessary complexity for consumers without addressing the underlying issues used to justify replacing the product.  

“As the UK’s largest LISA provider, we will engage constructively with HM Treasury to ensure any future approach builds on what works, strengthens saving behaviour, and delivers sustainable support for first-time buyers.”

Moneybox is urging the Government to work with industry to evolve and future-proof the LISA, ensuring it continues to support long-term saving and homeownership across the UK.

ENDS

FULL OPEN LETTER:

Dear Chancellor,

We are writing to urge you to build on the success of the Lifetime ISA (LISA), trusted by a rapidly growing community of over 1.5 million people saving for a first home or retirement, rather than replace it.

We support your ambition to improve outcomes for first-time buyers and long-term savers but the decision to consult on the creation of a new first-time buyer product – the third in just over ten years – is a costly exercise in policy theatre, potentially failing to address the very issues cited to justify replacing the LISA.

The LISA is working, and with thoughtful updates to futureproof it, it can work even better in today’s conditions. Our ask is that you:

  1. Retain the LISA for new customers, rather than introducing a replacement product
  2. Commit to an annual review of the house price cap to ensure it keeps pace with market conditions
  3. Reform the withdrawal penalty by reducing to 20% so that savers are not unfairly penalised

We are also concerned that the retirement use case of the LISA will not be replicated. At a time when 15 million people are not saving enough for later life, and only 36% of the UK’s self-employed are on track to retire with adequate savings, it’s deeply concerning that the LISA’s role in incentivising people to put money away for retirement earlier in life is being set aside.

The proposed new product risks repeating problems the LISA was designed to solve. While paying the bonus at purchase is politically attractive, it is economically and behaviourally inferior. The monthly bonus is a critical feature to drive sustained saving behaviour among first-time buyers.

The monthly bonus also solves issues demonstrated by the Help to Buy ISA, where funds arrived at the point of purchase rather than when they were needed.

The LISA’s benefits also extend beyond individuals: for every £1 spent on LISA bonuses, the Treasury recoups £1.45. Over 110,000 jobs have been supported since 2019/20, and £9.4bn has been added to the economy through LISA-stimulated house purchases. Scrapping it could leave taxpayers up to £3 billion worse off by 2041.

In 2022, two years before Labour came into power, Keir Starmer delivered a speech at the Labour Party conference where he said: “My message is this: If you’re grafting every hour to buy your own home Labour is on your side. Labour is the party of home ownership in Britain today.”

Since then, over 250,000 first-time buyers have used the LISA to get themselves onto the property ladder in the toughest buying conditions in generations. In 2025 alone, the product supported a first-time buyer onto the property ladder more than once every ten minutes. If Labour is the party of home ownership, you must back the LISA and work with us to evolve it so it continues helping young savers build their futures for generations to come.