'I lost thousands in savings and my partner's money is in limbo'

The Lifetime ISA (LISA) was set up in 2017 to help people save for retirement or purchase a first home costing up to £450,000. First-time buyers can put aside £4,000 a year and get an annual government bonus of 25%.

But if savers are unable to find a property below the cap and need to withdraw the money, they face a financial penalty which costs them 6.25% of their savings.

With the average first-time buyer now spending £463,000 in London, the scheme's property price cap is seen by many as being out of step with the capital's housing market.

Based on figures from September 2025, BBC analysis found that the median LISA user could afford:

In 13 boroughs, the median price for all types of properties was above £450,000.

Those making unauthorised withdrawals outnumber the people using a LISA for a house purchase: in 2024-25, across the UK about 87,250 people made authorised withdrawals for a house purchase, while 129,200 made unauthorised withdrawals.

We speak to young Londoners about their experiences with the scheme.

Fraser Glen, 35, and his partner Sophie Bauer, 30, both started saving into Lifetime ISAs a few years ago with the intention of using the funds to get on to the property ladder.