Lifetime ISA for Lifetime Events
TISA, the financial services membership association, is calling for industry professionals and the general public to have their say on which additional lifetime events should be included in the Lifetime ISA (LISA) to allow for a penalty free withdrawal. TISA is conducting a survey to determine which three lifetime events should be proposed to HMT for future implementation.
The proposed Lifetime ISA (LISA) was announced by the Chancellor in the last Budget and will be launched in April 2017. At the time, the Chancellor announced that the Government will be looking to add further lifetime events (other than house purchase and terminal illness which HMT is already making available) eligible for savings and eligible for the Government bonus. TISA is seeking public involvement so that the final design for the LISA reflects what people really want.
LISAs will allow anyone aged under 40 to put money into an ISA before their 50th birthday, and those using this savings vehicle will receive an added 25% bonus from the Government. Individuals will be able to save up to 4,000 each year, and receive a bonus from the Government which is capped at a maximum of £1,000 a year.
Currently, the savings and bonus can be withdrawn based on three criteria:
1. House purchase for first-time buyers
2. Terminal illness
3. Retirement at 60 years old
However, those wishing to withdraw their savings before they turn 60 (excluding the above criteria), will lose the Government bonus (and any interest or growth on this), and will also have to pay a 5% charge.
Commenting on the Lifetime ISA, TISA Policy Strategy Director Adrian Boulding said:
“The Lifetime ISA is a new form of ISA designed to help people save for lifetime events. It is essentially a lifetime savings plan for lifetime events without you having to predetermine what you need to save for. TISA is conducting this survey as we feel it is important for everyone to have their say on what other significant lifetime events should be included in the design of the LISA.
“It’s already a much needed incentive for those who currently find it hard to save to consider doing so. There is much scope for the LISA to enable individuals to save as much or as little as they wish each month and gives them greater control their finances. We see this as an opportunity for the Government to provide people with more choice and more flexibility.
“We are looking forward to as many people being involved and having their say to what lifetime events should be included in the LISA. We will continue to work closely with the Government, industry and trade bodies in the consultation around this policy.”
If you’re interested in voting, please click the following link, highlighting which three additional lifetime events from the list below should be allowed as penalty-free withdrawals from the Lifetime ISA:https://www.surveymonkey.co.uk/r/lisavote
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For further information please contact:
Alistair Kellie – Telephone: 0207 680 6558/Email Alistair.Kellie@newgatecomms.com
Sara Neidle – Telephone: 020 7680 6550 / Email Sara.Neidle@newgatecomms.com
Email: TISA@newgatecomms.com
Notes for Editors
TISA is a not-for-profit membership association operating within the financial services industry. The focus of our recommendations and actions is improved outcomes for consumers and UK plc with this approach leading to a stronger UK financial services industry.
TISA’s growing membership comprises over 150 firms involved in the supply and distribution of savings and investment products and services. These members represent many different sectors of the financial services industry, including asset managers, insurance companies, fund managers, distributors, building societies, investment managers, third party administrators, consultants and advisers, software providers, financial advisers, pension providers, banks and stockbrokers.
Having a legacy of focusing predominantly within the tax incentivised products area, TISA has in recent years moved into the broader savings and investments world, extending our standing as trusted adviser over a much greater remit.
TISA has a successful track record in working cooperatively with government, regulators, HMT, DWP and HMRC to improve the performance of the industry and the outcomes for the public. Effective policy and regulation and the creation of efficient industry infrastructure continues to be the major focus for our members. TISA is unique in that it represents the entire financial services industry, incorporating cross-sector policy, industry and technical expertise. Whilst we maintain a solid partnership with government, the regulators and wider industry, we remain independent and develop neutral views and opinions. This impartiality is reflected in our ability to drive development projects which improve industry performance and consumer outcomes, putting us in the unique position of being able to constantly challenge the status quo to bring about material improvement.