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The Chancellor announces plans for the launch of the new Lifetime ISA

09 September 2016

Image for The Chancellor announces plans for the launch of the new Lifetime ISA

The government announces they are close to launching the new Lifetime Savings Account with some firms saying they are ready to offer their own LISAs by April.

The treasury presented the House of Commons with the new Savings Bill this week, stating the intention to have the Lifetime ISA available by April 2017.

Since the announcement of the LISA in March this year there have been many concerns from within the pension industry. Notably, from previous pensions ministers.

Dr. Ros Altman who was replaced by MP Richard Harrington as Pension Minister earlier this year, says the move appears to downgrade the role of pensions.

Dr. Altman has previously spoken about how she would scrap the LISA altogether as she feels that it 'muddies the water between ISAs and pensions'.

Steve Webb, also former pension minister, described the LISA as an unsuitable retirement product and could leave younger savers with less at retirement age.

'With the government bonus being switched off at fifty, the Lifetime ISA starts to look very unsuitable for retirement compared with a workplace pension,' Webb warned.

Hargreaves Lansdown are welcoming the arrival of the LISA and are ready to offer savings options to their customers from April 2017.

Tom McPhail Head of pension research at Hargreaves Lansdown said it was "good news" that the Lifetime ISA would not be delayed and the design had been kept simple.

"It is good news for investors that the government has chosen not to delay the launch of the Lifetime ISA, as we know investors are keen to take advantage of it." say McPhail

Other companies have been less enthusiastic about the Lifetime ISA.

Aegon and Standard Life have said they would not be ready to launch by April 2017, and urged the government to delay the introduction of the LISA.

Published 09.09.2016

ceri.pugh@wilmingtonplc.com