Is the Lifetime ISA now a dead-end account?
Savers who have tied their money into a government backed Lifetime ISA could find themselves stuck in their current deal as major providers refuse to accept transfers.
Launched in April 2017, the Lifetime ISA, or Lisa, allows those aged 18 to 39 to save up to £4,000 each tax year and receive a government bonus of 25pc until the age of 50. This money can be withdrawn before age 60 only to buy a property. Any other use triggers the 25pc penalty.
The restrictions about how the Lisa can be used, and the penalty if these rules are broken, means savers could get out less than they put in. Transfers between providers to get a better deal do not incur the penalty.