Money saving expert Martin Lewis has voiced significant concerns on behalf of Lifetime ISA (LISA) holders, as the government confirms plans for a major shake-up of first-time buyer savings products.
Government Plans New Simpler ISA Product
The government intends to launch a formal consultation in early 2026 on implementing a new, simpler Individual Savings Account (ISA) product designed for those trying to get on the property ladder. This new product is expected to eventually replace the existing Lifetime ISA, a move that has sparked anxiety among current savers.
Martin Lewis stated that existing LISA holders are "very worried" about the uncertainty. Their primary fear is that their current savings vehicle could become a "dead product" if the rules change without clear and fair provisions for transferring their funds and retaining their government bonuses.
Key Promise on the £450,000 House Price Cap
A crucial concession has been secured, however. Lewis confirmed that a senior government member has promised him the consultation will explicitly address increasing the £450,000 house price threshold for using the LISA. This cap has been frozen since the product's launch in 2017, and with rampant property price inflation, it has priced a growing number of savers, particularly in more expensive regions, out of the market.
The explicit promise to review this threshold is intended to reassure the hundreds of thousands of existing savers that they "cannot be left with a dead product" that is rendered unusable simply because average house prices have soared past the outdated limit.
Calls for a Smooth Transition Path
Beyond the house price cap, Martin Lewis has outlined further action he will be taking. He confirmed he will be lobbying for a solution that allows current LISA and Help to Buy ISA holders to transfer all of their savings, including accrued government bonuses, seamlessly into any new and improved product that emerges from the consultation.
This would protect years of diligent saving and ensure a smooth transition, rather than leaving savers in limbo between two different schemes. It is important to note that despite the consultation launch in early 2026, the design and implementation of any new product is expected to be a long-term process, signalling that these reforms are part of a multi-year plan.
The coming consultation will therefore be closely watched by aspiring homeowners across the UK, who will be keen to see how the government balances innovation with fairness for those who have already started their saving journey.
