When Sean transferred money to a Lifetime ISA, he didn't expect to pay for a withdrawal because it was less than 12 months old.
What happened
Sean had had a Help to Buy ISA for a while. He opened a new Lifetime ISA and transferred a large amount of money into it from his existing Help to Buy ISA.
A little while later, Sean contacted the provider and said that he wanted to withdraw all the money so he could buy his first home. The provider explained that since the Lifetime ISA was opened less than 12 months before, he would have to pay a withdrawal charge.
Sean was unhappy because he thought there would be continuity between the ISAs. He thought the period of time he’d had the Help to Buy ISA would extend to the Lifetime ISA.
So he brought his complaint to us.
What we said
We looked at what the business had said to Sean when he opened the Lifetime ISA. The policy’s terms explained that a customer could transfer an existing Help to Buy ISA into a Lifetime ISA. It also explained that the customer would receive the government bonus on the full amount that was transferred.
The policy went on to explain that the transfer would effectively backdate the Lifetime ISA, restarting the 12-month eligibility for withdrawing the money. In the terms, it said: ‘The account opening date is the date that we receive your first payment. This is the date your 12-month period starts if you want to make a withdrawal for a first house purchase.’
We thought that the business was clear about the account’s opening date and 12-month eligibility for avoiding withdrawal charges. It was explained in the account’s terms.
We didn’t think it would be fair to say the business was wrong in charging the withdrawal fee. Sean had taken out the money before the 12-month condition was met.
After looking at the evidence from both sides, we did not uphold Sean’s complaint.