Proposed reforms to the UK's Lifetime ISA system could markedly change its role in retirement planning. The consideration involves removing the option to keep Lifetime ISA funds until age 60, effectively ending its function as a pension-like vehicle. This potential overhaul, part of a wider Treasury review, has raised concerns among savers, providers, and financial experts.
The Lifetime ISA, which provides a 25% government bonus on annual contributions up to £4,000, is popular among younger workers. Its flexibility—allowing penalty-free withdrawals for a first home or after age 60—is a key appeal. Eliminating its retirement purpose would turn it into a solely ...