A study by Moneybox, the UK’s largest provider of LISAs, found that 82% of Moneybox LISA savers report that saving with a LISA has improved their overall savings habits.
A similar number (84%) said they feel more confident about their financial future since opening a LISA and 81% said having a LISA had motivated them to save more frequently.
Almost eight in 10 (79%) said they are saving more consistently, with 75% now saving weekly or monthly, up from 54% before opening their LISA.
More than two-thirds (67%) stated that the LISA was the first product they had used to save towards a major financial goal.
The LISA was designed with a dual purpose – to help young savers build their first home deposit and prepare for retirement. Savers can put away up to £4,000 per year and receive a 25% bonus from the Government on their savings.
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While young people primarily use LISAs to buy their first property, the product is playing an increasing role in long-term financial planning.
The vast majority (79%) of Moneybox customers polled said they would consider using the LISA to boost their retirement savings, with 47% saying they already intend to keep contributing to their LISA after buying their first home.
Other research from Moneybox found that Bristol, Manchester and Belfast have emerged as the top hotspots for first-time buyers using their LISA in 2024.
Buyers in Bristol typically paid £315,413 for their home, withdrawing an average of £15,750 from their ISA, including a typical £2,895 Government bonus, to do so.
Cecilia Mourain, chief home buying and savings officer at Moneybox, said: “Our data clearly shows just how valued the LISA is by UK savers. Not only has this fantastic savings product helped hundreds of thousands of savers get onto the housing ladder, but many have done so much sooner than would otherwise have been possible.
“The wider societal benefits of LISAs cannot be underestimated either. By enabling more people to get on the property ladder earlier and supporting their long-term savings, the LISA plays a critical role in promoting financial security and wealth creation across the UK.”
Despite this, at the beginning of the year, the Treasury Committee announced a probe into whether LISAs are fit for purpose.
