Banks reject cash LISA on launch

A grand total of zero banks and building societies have opted to take up the Government’s new Lifetime ISA (LISA) cash accounts on the day of their launch, it has emerged.

The LISA is aimed at pension savers and first-time buyers, but banks say they have not been given enough details or time to prepare.

The LISA also received criticism earlier this year, after it emerged that withdrawing cash for anything other than its intended purposes will result in the account holder losing money.

Just three providers said they will launch the stocks and shares version of the LISA this month.

The cash version allows holders to deposit up to £4,000 each year, in which the Government will add a 25 per cent top-up.

The cash can only be withdrawn when the account holder turns 60, or when it is used to purchase a first home. Withdrawing early will incur a 25 per cent penalty.

Hannah Maundrell, editor-in-chief of Money.co.uk, said: “It’s a bit of a damp squib as there are no cash Lisas yet confirmed for launch.

“Yet again the government has promised consumers the chance of a shiny new savings vehicle without consulting with the industry on how and when they can deliver it.”

In December last year, Nationwide announced that it would not offer LISAs because they were “too complicated”.

It added that it would continue with the help-to-buy ISA instead.