Recommendations & Conclusions
4 items
1
Conclusion
8th Report - Lifetime Individual Saving…
Acknowledged
We endorse the Government’s policy objectives of supporting first-time buyers and encouraging long-term retirement savings. However, the Lifetime ISA may not be the most efficient use of taxpayers’ money to achieve those disparate objectives, which might require separate, tailored policies. (Conclusion, Paragraph 24)
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We endorse the Government’s policy objectives of supporting first-time buyers and encouraging long-term retirement savings. However, the Lifetime ISA may not be the most efficient use of taxpayers’ money to achieve those disparate objectives, which might require separate, tailored policies. (Conclusion, Paragraph 24)
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Government response AI summary
The government committed to working with the industry to consider ways to improve messaging around Lifetime ISAs, while reaffirming its commitment to making ISAs simple and flexible.
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HM Treasury
2
Conclusion
8th Report - Lifetime Individual Saving…
Acknowledged
Some Lifetime ISA providers only offer the cash Lifetime ISA. Retirement savings held within cash Lifetime ISAs may not achieve the best outcome for a Lifetime ISA holder over the long term, compared with investing in higher risk but higher return assets such as bonds and equities. (Conclusion, Paragraph 25)
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Some Lifetime ISA providers only offer the cash Lifetime ISA. Retirement savings held within cash Lifetime ISAs may not achieve the best outcome for a Lifetime ISA holder over the long term, compared with investing in higher risk but higher return assets such as bonds and equities. (Conclusion, Paragraph 25)
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Government response AI summary
The government reiterated the purpose and success of the Lifetime ISA and stated that it keeps all aspects of the policy under review and carefully considers all representations received, without committing to specific action on the performance of cash LISAs.
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HM Treasury
7
Conclusion
8th Report - Lifetime Individual Saving…
Acknowledged
We recognise the risks for certain individuals opting to save for retirement in a Lifetime ISA instead of a workplace pension, because of lower tax relief for higher- and additional-rate taxpayers and forgoing employer contributions. Although we recognise that it can be a valuable complementary saving product for many, such …
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We recognise the risks for certain individuals opting to save for retirement in a Lifetime ISA instead of a workplace pension, because of lower tax relief for higher- and additional-rate taxpayers and forgoing employer contributions. Although we recognise that it can be a valuable complementary saving product for many, such as the self-employed and all basic rate taxpayers, the Lifetime ISA may not be a suitable retirement saving vehicle for additional rate taxpayers. Given that HMRC’s 2024 to 2025 projections are that of 37.4 million taxpayers, 29.5 million will be paying the basic rate, the Lifetime ISA could provide a very useful and superior third pillar for basic rate and self-employed taxpayers. (Conclusion, Paragraph 81)
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Government response AI summary
The Government recognises the importance of the Lifetime ISA and is publishing two pieces of externally commissioned research on GOV.UK to further improve our understanding of how the LISA is used.
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HM Treasury
8
Conclusion
8th Report - Lifetime Individual Saving…
Acknowledged
The available evidence indicates that saving for retirement with a Lifetime ISA is working well for self-employed people. Any Government reforms to the ISA market must take the interests of the self-employed into account, because self-employed people have historically achieved low levels of retirement saving. (Conclusion, Paragraph 87)
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The available evidence indicates that saving for retirement with a Lifetime ISA is working well for self-employed people. Any Government reforms to the ISA market must take the interests of the self-employed into account, because self-employed people have historically achieved low levels of retirement saving. (Conclusion, Paragraph 87)
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Government response AI summary
The Government recognises the importance of the Lifetime ISA and is publishing two pieces of externally commissioned research on GOV.UK to further improve our understanding of how the LISA is used.
Read full response →
HM Treasury