Ndubuisi 'Andy' EgwimMoney Coach for Medics|Ex-NHS GP|21+ Yrs Investor| Founder, MoneyWiseDoctor.com|Helping Medics Avoid Big Money Mistakes

LISA Withdrawal Mistake Costing UK Doctors Thousands

7 Apr 2026 · 1 min

Watch on YouTube

0:58

In this video, the presenter explains the rules governing Lifetime ISA (LISA) withdrawals. Contributions receive a 25% government bonus, but any non‑qualifying withdrawal (i.e., not for a first‑home purchase or retirement after age 60) incurs a 25% penalty on the total balance, effectively returning less than the original contribution. Using a £4,000 contribution as an example, the speaker shows how the bonus raises the balance to £5,000, but a premature withdrawal reduces it by £1,250, leaving £3,750. The presenter warns that many people exceed their tax‑year allowance, especially when holding multiple ISAs of the same type, and advises anyone who has made this mistake to contact their ISA provider for guidance and to join a support group for further help.

Chapters

With LISA, if you withdraw money from LISA and you don't use it for buying your first home or for retirement at 60, you get less than the money you put in. So if you put in $4K and they gave you 25%, your money is now $5,000. If you decide to withdraw that LISA for anything other than buying your first home or retirement, you get 25% penalty on that $5,000, and 25% of $5,000 is $1,250. You end up with £3,750. So go back and check, make sure it's in the same tax year. If it's in the same tax year, you've exceeded it. It's a common mistake, especially now that people can have multiple ISAs, the same type of ISA. If you made that mistake, then you probably need to get in touch with your provider, highlight what has happened. It will not be the first time it's happening, and they will give you some direction. But most importantly, wherever you find out, get in the group. Let's chat.