Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what estimate he has made of the increase in the value of additional savings that will be made by people as a result of the establishment of the lifetime ISA announced in Budget 2016.

The Government is creating a new Lifetime ISA, providing savers with the flexibility to save towards a first home and retirement at the same time. From April 2017, people aged 18 to 40 will be able to open and save up to £4,000 each year into a Lifetime ISA and receive a 25% bonus from the Government, paid annually after the end of the tax year. The annual ISA savings limit for all adults will increase to £20,000 from April 2017. People can make full withdrawals from their Lifetime ISA accounts for a first home purchase (subject to a house price cap of £450,000 UK-wide) or from age 60. These withdrawals will be tax free. i) An estimate of the Exchequer impact from this policy was set out in Table 2.1 of the Budget 2016 document, available here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/508113/B2016Table_2.1.xlsx

The table below shows how this estimated Exchequer impact breaks down into that which is from Lifetime ISA and the increase in the ISA limit to £20,000.

ii) and iii) Estimates are not available.