Will additional lifetime events escape LISA exit fees?

TISA, the financial services membership association, is conducting a survey on which additional lifetime events should be included in the Lifetime ISA to allow for a penalty free withdrawal.

Related topics:  Savings & Investments
Rozi Jones
10th May 2016
house and savings

The survey will determine which three lifetime events should be proposed to HMT for future implementation.

The Lifetime ISA was announced by the Chancellor in the last Budget and will be launched in April 2017. 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Currently, the savings and bonus can be withdrawn at retirement, for first-time buyer house purchase, or in the event of terminal illness.

However, those wishing to withdraw their savings for any other reason will lose the Government bonus (and any interest or growth on this), and will also have to pay a 5% charge.

The Chancellor has announced that the Government will be looking to add further lifetime events eligible for savings and eligible for the Government bonus.

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.”

More like this
Latest from Property Reporter
Latest from Protection Reporter
CLOSE
Subscribe
to our newsletter

Join a community of over 30,000 intermediaries and keep up-to-date with industry news and upcoming events via our newsletter.