Grant Armstrong, Executive Director of Individual Distribution at Canada Life commented:
The Lifetime ISA looks very much like the first step towards a pensions ISA. Using this softly-softly approach means the Chancellor can assess sentiment and support of the measure while phasing it in slowly to get any kinks smoothed in advance.
“The Lifetime ISA is going to be a valuable tool in the right circumstances and will be particularly welcome to self-employed people, especially those paying the basic rate of tax, who don’t benefit from employer contributions to their pension. In the context of big cuts to the lifetime pension allowance, the Lifetime Isa and higher overall ISA limits will be important for those with strong lifetime earning potential.
“The aim of the Lifetime ISA – to encourage saving by younger people – is one that we can all rally behind. But one of the problems savers face is the proliferation of more options in how they save. This complexity can create a significant amount of confusion and will mean that financial advice will be even more important than it is now. Canada Life can assist advisers with the technical help they may be requiring.
“While it may not make the headlines, the Government’s decision to look at reducing the cost to consumers of financial advice by making it tax exempt is a big step forward, particularly in light of the ever increasing complexity of the UK’s tax system.