Responding to LISA’s challenge | KPMG | UK

Responding to LISA’s challenge: the industry must engage

Responding to LISA’s challenge

In the aftermath of the Budget, we discuss how the Lifetime ISA (LISA) may signal a fundamental change to pensions taxation


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Although some may have viewed this year’s introduction of the Lifetime ISA (LISA) as a Trojan horse for a shift from the EET model for pensions (exempt-exempt-taxed) to TEE, removing arguably one of the biggest incentives to save in the process, Andy Masters outlines why any firm administering savings and wealth must respond quickly and positively to LISA.

Pace of change remains slow

  • Despite the introduction of new products and services, 75 percent of customers and assets are currently in legacy products. 
  • There’s been limited progress on industry initiatives to support the wider aggregation of products such as the pensions dashboard.

The success of LISA lies in employers’ hands

  • Firms building their LISA on stand-alone infrastructure with no consolidated view of pensions and other savings propositions will regret it. 
  • Firms also need to consider whether to develop LISA in a way which future proofs it for future steps to make it an alternative to or replacement for the auto-enrolled pension.

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