Alexis got in touch when she lost the bonus from her Lifetime ISA when she decided to cash it in as she was buying her first home. 

What happened

Alexis had opened a Lifetime ISA so she could save to buy her first home. Less than a year later, she found the property she wanted to buy, so went to withdraw her money. But she was told that she would lose the bonus she’d been given as the Lifetime ISA had been open less than 12 months, so any withdrawal would incur a withdrawal charge. Alexis didn’t think this had been made clear to her when she opened the account.

Alexis pointed out that she was buying the property on shared-ownership basis, so asked if she could wait and then use the money from the Lifetime ISA when she purchased a further share of the property at a later date. But the business said that this option wasn’t possible. They explained that if Alexis bought an initial share in the property, it would give her a legal interest in the property which would mean in the future she wouldn’t meet the definition of a first-time buyer.

Alexis wasn’t happy with this decision so came to us to investigate.

What we said

We looked both sides of the story about what happened. We understood that there are quite complex rules governing Lifetime ISAs, but we found that the business had interpreted them and explained them clearly. It was clear that they had explained to Alexis about the withdrawal charge when she opened the account.

We accepted that the business hadn’t highlighted the issue about buying a future share in the property, but could see that they had done enough to outline all the basic rules about the Lifetime ISA at the start. We didn’t think it would be reasonable for the business to foresee all the possible outcomes with Alexis’ account, so wouldn’t have looked at this particular issue when she opened the account.

As a result, we decided not to uphold Alexis’ complaint.