Source · Select Committees · Treasury Committee
Recommendation 7
7
Lifetime ISA may not be suitable for additional rate taxpayers, despite benefits for others.
Conclusion
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)
Government Response
A response document is linked to this report, dated 11 September 2025. Response attribution to this conclusion has not been verified. Read the response document ↗