Lifetime ISA savers who paid the 25% withdrawal penalty are still £136m ahead of their own contributions, analysis finds

From the Newshound archive · first published 19 September 2026.

New analysis covering more than one million Moneybox customers reveals that Lifetime ISA savers who incurred the controversial 25% government withdrawal penalty were, collectively, £136.1 million better off than the total they had personally put in. The findings challenge the widely held assumption that paying the charge inevitably leaves savers worse off. Moneybox acknowledges that outcomes can still be negative for individuals, but says that when government bonuses and investment growth are factored in, the broader picture is positive.

Penalised customers who had not yet purchased a home were, in aggregate, £53.8 million ahead of their own contributions.