Nucleus: include advice as non-charge withdrawal in LISA

The government recently announced that the 25% withdrawal charge for the Lifetime ISA will not apply for the first year, as people could face a 25% Government charge up to 12 months before they receive the bonus.

Nucleus is urging the government to ensure that all communications make clear the withdrawal charge will reclaim government bonus (plus interest) as well as a charge on member contributions.

In other recommendations, Nucleus believes the Lifetime ISA should be merged with the Help to Buy ISA, and wants all self-employed people to be able open a Lifetime Isa, up to age 50.

It also says the Lifetime ISA annual payment limit should be raised and reviewed each year based on house price increases.

Rachel Vahey, product technical manager at Nucleus, commented: "With the introduction date for Lisa fast approaching, much of the detail remains unclear. For some, LISA will provide them with an effective way of saving for their goals - whether that's their first house or their later life. But it won't be suitable for all.

“Getting regulated advice could help many make key decisions about whether to save within a LISA. To help people access advice we would like advice charging to be a charge-free withdrawal, instead of having to pay a 25% charge. This could mean investors getting the help they need, and paying for it the same way they do for other ISAs and pensions."