Question to the HM Treasury:

To ask the Chancellor of the Exchequer, pursuant to the Answer of 29 October 2021 to Question 63907, if he will make an assessment of the potential merits of increasing the Lifetime ISA limit so that it reflects property prices in different localities.

The Lifetime ISA is intended to support younger people saving for their first home or for later life by offering a generous government bonus of 25% on up to £4,000 of savings each year. These funds, including the government bonus, can be used to purchase a first home up to the value of £450,000.

The Government considers that the £450,000 price cap is suitable to support the majority of first-time buyers across the UK, who typically purchase less expensive properties than other buyers.

The most recent Office for Budget Responsibility forecast stated that bonus payments will have an exchequer cost of £3.7 billion between 2021 and 2027. The UK-wide price cap ensures that this significant investment of public money is more precisely targeted towards households that may find it more difficult to get onto the property ladder.

First-time buyers who can purchase a home valued over £450,000 are likely to have an income significantly above that of the average household in the UK and are therefore more likely to be able to purchase a first home without the support of this scheme.

However, the Government keeps all aspects of savings policy under review.