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Thousands of people are set to be punished by HMRC after "doing the right thing". Statistics show HMRC raked in £102million in 2024-25 - up from £75.3m the year before - courtesy of Lifetime ISA, or Lisa, penalties.

Savers making unauthorised withdrawals face a penalty from HMRC - with 129,000 people hit last year, up from 99,700. Sarah Coles, head of personal finance at Hargreaves Lansdown, said: "In 2023/24 more people paid withdrawal penalties than the number who used their LISA to buy a home.

"In that year, 7% of all LISA savers withdrew money for reasons other than buying their first home or retirement and paid a penalty of 25%. Some have made a number of withdrawals over the years and paid a series of penalties.

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