Some people who pay in a personal savings account (LISA) throughout their lifetime can receive the least money, as they put, MPs have warned, as they ask to improve the product.

Any person under the age of 40 can open a lisa to save retirement or buy a house first. You can put up to £ 4,000 per year and the government will top it up to 25%.

But the Treasury Committee said that if the Lisa Fund was withdrawn early due to unexpected circumstances, the allegations mean that people are facing 6.25% of their savings. It also warned that the “complex” product could not correspond to all, and it can be sold incorrectly to people on certain benefits.

The government has said that first it is seeing improvement in ISAS.

You can catch a lisa in addition to any other type of personal savings account, such as cash ISA or stock and stock ISA. These other options allow you to pay up to £ 20,000 per year.

Lisas was launched in 2017 under the then Orthodox government.

Since then, 6% of eligible adults have opened one, according to the most recent data, about 1.3 million accounts are still open.

The MPs of the Treasury Committee are collecting evidence on whether the product is still fit for the purpose.

In a new report, the committee stated that Lisa’s double purpose is to help save people for both short and long -term “it is more likely that consumers will choose inappropriate investment strategies”.

The report said, “Cash Lisas may suit the first home saving, but cannot achieve the best results for those using it as a retirement savings product, as they are unable to invest at high risk, but potentially high with return products such as bonds and equity.”

It mentioned an increase in allegations of withdrawal, in which almost doubled people were unauthorized (99,650) compared to the number of people who used their lisa to buy a house (56,900) in 2023-24.

The committee said it should be considered a possible sign that was not working as a product.

It also described the rules that punish the benefits as “fruitless”.

Currently any savings held in a LISA can affect eligibility for universal credit or housing benefits, while it is not a case for other individual or workplace pension schemes.

If it is not changed, the committee said that Lisa should “clearly be labeled as an inferior product” for those who may be eligible for such benefits.

The office for budget responsibility predicts to spend on the bonus paid on Lisas, the treasury will cost around £ 3BN in the next five years.

The committee questioned whether Lisa was “the best use of public funds, looking at the current tension on public finance” and also expressed concern that the product “could subsidize the cost of the first house for the rich at an important cost for the taxpayer”.

The committee chairman Dame Meg Hilier said, “We are still waiting for further figures, which can highlight something, which are actually helping the product.”

“We already know, however, it is that it needs to be improved before improving the lifetime ISA, it can actually be described as a market-agar savings product for both possible homebuilders and people who want to save for their retirement at an early age.”

The BBC has approached the treasury to response to the report.

The government has earlier stated that it is “looking for options for reforms” to encourage to invest when it comes to ISAS.

It has said that while supporting people is important, it wants to correct the balance.