Moneybox, the UK's largest Lifetime ISA (LISA) provider, has urged the government to reform the existing product rather than replace it, warning that a full overhaul would be 'costly policy theatre'. In an open letter, the firm set out a three-point plan to improve the LISA, arguing that it supports 'better long-term financial outcomes' for savers.
The call comes as the government reviews the LISA, with a replacement 'first time buyer ISA' expected to launch in 2028. Concerns about the current product include its sometimes-confusing dual purpose for first-home purchases and retirement saving, as well as penalties for breaking the rules, such as buying a property above the £450,000 price cap, which can result in savers losing some of their original cash and the government bonus.
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.' The government has previously said that anyone already holding a LISA will be able to continue adding to it.
In separate savings news, research from Tesco Bank suggests microtrends such as round-up apps and multiple savings pots are helping people save more frequently. Meanwhile, Moneybox has raised its Cash ISA rate to 4.75 per cent, including a 12-month bonus, with a maximum of three withdrawals per year allowed without affecting the rate. The firm also posted record 2025 revenue of £115m, up 23 per cent year on year, with customer numbers reaching 1.7m.
