Executive Summary — Understanding the use of the Lifetime ISA: quantitative research with eligible non-holders
Published 4 September 2025
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This publication is available at https://www.gov.uk/government/publications/understanding-the-lifetime-isa-non-holder-quantitative-research/executive-summary-understanding-the-use-of-the-lifetime-isa-quantitative-research-with-eligible-non-holders
Prepared by Ipsos for HM Revenue and Customs (HMRC)
Daniel McGrady, Helena Davies (Ipsos)
Research report number: 837
July 2025
Disclaimer: The views in this report are the author’s own and do not necessarily reflect those of HMRC
1. Glossary and abbreviations
| Term | Definition |
|---|---|
| Help to Buy ISA | A type of cash Individual Savings Account that was introduced by the UK government to help first-time homebuyers save for a deposit on a property. The Help to Buy ISA has now closed to new applicants. |
| Help to Save | A type of savings account introduced by the UK government. It allows certain people entitled to Working Tax Credit or receiving Universal Credit to get a bonus of 50p for every £1 they save over 4 years. |
| Income Tax Rates | For earnings above the personal allowance, income tax is applied at the following rates: basic rate (earnings of £12,571 to £50,270 per year), higher rate (earnings of £50,271 to £125,140 per year) and additional rate (earnings of over £125,140 per year) |
| Individual Savings Account (ISA) | An Individual Savings Account (ISA) is a type of tax-free savings account. Individuals can save or invest a certain amount of money each year without having to pay Income Tax on their savings and dividend income or Capital Gains Tax on the sales of assets that have increased in value. There are different types of ISAs such as cash ISAs and stocks and shares ISAs. |
| Lifetime ISA | A LISA is a type of Individuals Savings Account launched in April 2017 to help people aged 18 to 39 save for their first home or later life. |
| Personal Allowance | The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on. |
| Stocks | Company shares. |
| Tax year | The period of 12 months (6 April to 5 April the following calendar year) used by government when setting tax rates and allowances and calculating any tax liabilities. |
| Withdrawal charge | A 25% charge applied where individuals withdraw their money from the LISA for reasons other than house purchase, retirement after the age of 60, or terminal illness. |
2. Executive Summary
2.1 Introduction
In January 2025, HM Revenue and Customs (HMRC) commissioned Ipsos UK to undertake quantitative research with individuals living in the UK who were eligible for a Lifetime Individualised Account (LISA) but did not hold one (non-holders). This research aimed to understand non-holders’: characteristics (including demographic information and savings habits), awareness of the LISA, reasons for not opening a LISA and future intentions to open an account.
This research builds on previous research commissioned by HMRC in which Ipsos UK explored the awareness, attitudes and behaviours of non-holders: Understanding the use of the Lifetime ISA: qualitative research. HMRC has also commissioned quantitative research with LISA holders: Understanding the use of the Lifetime ISA: quantitative research with LISA holders.
2.2 Background
The LISA is a type of savings account launched in April 2017 to help people in the UK aged 18 to 39 save for their first home or retirement. The LISA allows individuals to save up to £4,000 per year and to receive a 25% bonus from the government on their contributions until they reach the age of 50.
Cash, stocks and shares, or a combination of both can be held in a LISA. Those withdrawing their money from the LISA for reasons other than house purchase (providing the home is under £450,000 and the account has been open for 12 months), after the age of 60, or terminal illness pay a withdrawal charge of 25%.
2.3 Research objectives
The core objectives of this research were to:
- establish the current demographic profile of non-holders and explore demographic differences in knowledge, perceptions, and attitudes towards the LISA
- understand non-holders’ levels of knowledge and awareness of the LISA and its features
- explore the reasons why non-holders have not opened a LISA
- explore non-holders’ future intentions to open a LISA, including what might motivate them to open an account in the future
2.4 Methodology
This research was conducted as an online survey of 1,066 (unweighted total) of non-holders using Ipsos’ Random Probability online panel, the Knowledge Panel. The survey was conducted between 6 to 12 February 2025.
The survey was sent to 3,640 panellists who were eligible to open a LISA (aged between 18 to 39) at the time of completing the survey. Of these, 1,456 respondents completed the screener questions of the survey which ensured only those who had never opened a LISA were eligible to complete the full survey (1,066 respondents).
Calibration and design weights were applied to the full dataset (including screen outs) to account for household size and to correct any imbalances in the achieved sample, in line with national statistics on the eligible population. The data was cross tabulated by demographic and attitudinal characteristics and significance testing was applied at the 95% confidence level. This report presents findings on the non-holder population who completed the full survey.
2.5 Key findings
2.6 LISA take-up rates
Overall, 71% of survey respondents reported that they had never opened a LISA (non-holders). 25% said that they had opened a LISA at some point in the past, and 3% said ‘don’t know’.
2.7 Financial confidence and savings behaviours
Non-holders were asked to rate their knowledge of personal finances on a scale of 1 to 10.Over half (58%) of non-holders reported that they were knowledgeable (7 to 10 on the knowledge scale), 30% reported that they had some knowledge (4 to 6 on the knowledge scale), and 10% reported that they had little to no knowledge (0 to 3 on the knowledge scale).
Over half of non-holders (56%) reported that they were saving or investing monthly or more frequently. For those who saved or invested, the most common forms of savings were in an easy access savings account (33%), regular monthly savings accounts (30%) and a workplace pension (29%). Non-holders who saved or invested were most commonly saving for a large purchase (19%) to have long-term savings (19%) and for unexpected costs (17%).
2.8 Knowledge and awareness of the LISA
Over 6 in 10 (63%) non-holders were aware of the LISA before participating in the survey. Non-holders had most commonly heard about the LISA from Martin Lewis or Money Savings Expert website (33%), friends or colleagues (28%), parents or other family members (26%) and their bank or building society (24%).
Age was a driving factor in awareness of specific LISA features, with those in the 32 to 39 age group being less likely to know about the savings cap and government bonus, the LISA age criteria and the property price cap compared with younger age groups. Education level was also an indicator of awareness, with graduates being consistently more aware of LISA features than non-graduates.
The feature with the greatest awareness amongst non-holders was the £4,000 a year maximum savings cap and the 25% government bonus to the savings in the LISA (49% had some awareness prior to the survey). The feature with the least awareness was that individuals can save into a LISA until the age of 50, with 32% of non-holders having some awareness of this before completing the survey.
2.9 Reasons for not opening a LISA
Non-holders aware of the LISA before completing the survey were asked why they had not opened an account. Among this group, the sole or main reason for not opening a LISA was not having enough money to save (26%).
Other sole or main reasons included already owning a home (15%), using alternative savings plans (11%), not knowing enough about the LISA (9%), and not being able to use the LISA outside the LISA rules (8%). Overall, one in five (19%) non-holders selected not knowing enough about the LISA as a reason, suggesting that knowledge and awareness of the LISA may be a barrier to take-up.
2.10 Future intentions to open a LISA
Overall, 3 in 10 (30%) non-holders were likely to open a LISA in the future. Those with higher personal incomes were less likely to open a LISA in the future compared to those in the tax brackets for lower personal incomes.
All non-holders were asked what would motivate them to open a LISA in the future, including those who had not been aware of the LISA before the survey and had learned about the account during the survey. When prompted with a range of options, a change to the rules so that original savings would not be lost with the withdrawal charge was the most common response (42%)
Those aware of the LISA before the survey were more likely than those who were not aware to say they would open a LISA if they would not lose savings with the withdrawal charge (48% compared to 32%). Other common motivating factors were needing to know more about the LISA (32%), feeling ready to save (28%), wanting to save more than £4,000 a year (26%), and having greater confidence in personal finances (26%).
2.11 Demographic profile of non-holders
Of the non-holder population:
- 42% were aged 32 to 39 years old, 31% aged 25 to 31 and 27% aged 18 to 24
- 76% were from a white ethnic background 20% were from an ethnic minority background. 3% said ‘prefer not to say’ and 1% said ‘don’t know’ when asked about their ethnicity
- 69% were single, 26% were married/civil partnered, 1% were divorced, 1% were separated but legally still married, 1% were in a registered civil partnership, and 2% said ‘prefer not to say’ when asked about their marital status
- overall, 30% were a parent or guardian of a child in their household
- of those who were working, 93% of non-holders were employed by an employer at the time of the survey, 6% were self-employed, and 1% preferred not to report their employment status
- over half (53%) owned their home outright or had bought it on a mortgage, 25% were renting from a private landlord, 12% were renting from their council or housing association
- one in twenty responded that their accommodation was in the ‘other’ category (5%), 3% said they don’t know and 1% said prefer not to say to this question
- 20% earned up to £12,570 a year, while slightly less (18%) earned between £12,571 to £24,999. A further 20% earned between £25,000 to £34,999 and 16% earned between £35,000 to £50,270
- less than one in ten (8%) earned between £50,271 to £74,999 and 4% earned more than £75,000 a year, and the remaining 11% was comprised of 6% who said don’t know and 6% who said prefer not to say