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45,000 Lifetime ISA savers hit with repeat withdrawal penalties in a single year, with worst-hit individuals facing charges exceeding £11,000

From the Newshound archive · first published 8 October 2026.

45,000 Lifetime ISA savers hit with repeat withdrawal penalties in a single year, with worst-hit individuals facing charges exceeding £11,000

Around 45,000 Lifetime ISA savers were penalised more than once for withdrawing cash in 2024-25, with some losing far more than the government bonus they earned. The data, uncovered via a Freedom of Information request by money app Plum, revealed the average repeat-penalised saver lost £760 — but the worst-hit 25 individuals faced average cumulative charges of more than £11,000. The penalty mechanism is the scandal: a 25% charge on the total pot, not just the bonus, means savers end up with less than they originally put in.

The £450,000 property price cap has been frozen for nine years, while average UK house prices have hit £531,548 — locking out buyers across London and the South East.

Maike Currie of PensionBee said the figures 'expose a fundamental flaw in the Lifetime ISA', adding: 'Life gets in the way, and the charge can take a slice of your own savings.'

MoreDaily MailLifetime Isa savers hit with multiple withdrawal penaltiesCity A.M.Thousands of Lifetime ISA savers slammed with multiple withdrawal penaltiesDaily RecordLifetime ISA warning as 45,000 savers hit with withdrawal charges more than once - Daily RecordFF NewsPlum FOI Reveals 45,000 Lifetime ISA Savers Hit With Multiple Penalties in Single Year - FF NewsFinancial Reporter45,000 Lifetime ISA savers fined more than once in 2025 - Financial ReporterInYourAreaLifetime ISA called 'flawed' as savers hit with repeat penalty charges - InYourArea
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