I’ve been paying into a lifetime Isa for many years. This year, due to an emergency, I needed to withdraw some of the money. I gave my bank the instruction, but found that I have been penalised and that I’ll get back less than I originally invested. Is that right?A Which? Money member
source https://www.which.co.uk/news/article/ive-been-punished-for-withdrawing-money-from-my-lifetime-isa-axYiO0a2f1Dy
'Those considering a lifetime Isa need to take care'
Rubal Channa, Which? money expert, says…Their main appeal is that for every pound you put in, the government adds another 25p. You can contribute up to £4,000 a year. Plus, all interest or investment growth is tax-free.
This means that you lose more than just the government bonus – you also lose 6.25% of your own money.
If your money had grown by more than 6.25% through interest or investment growth, you might still get out more than you originally put in.
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source https://www.which.co.uk/news/article/ive-been-punished-for-withdrawing-money-from-my-lifetime-isa-axYiO0a2f1Dy