People are not good at maths

HMRC’s newly published ‘Understanding the Use of the Lifetime ISA’ report lays bare the confusion at the heart of one of the government’s flagship savings products. Most striking is the revelation that even financially literate savers, including those actively contributing to their LISA, did not realise that the 25% penalty on non-qualifying withdrawals can leave them with less than they originally invested. People simply do not realise it’s not just a clawback of the government bonus – it’s a loss on their own money.

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