Stewart Hastie, Pensions Partner, KPMG, comments on the creation of a Lifetime ISA proposed in the 2016 Budget.
Stewart Hastie, Pensions Partner, KPMG, comments on the creation of a Lifetime ISA:
“The Lifetime ISA announced today is ultimately a testing ground for the Pensions ISA proposed before the budget. It gives the Government the option to see how consumers react to the ISA option.
“Giving consumers more choice that encourages long-term saving is a welcomed move but working out if you will be better off in your existing pension or in a lifetime ISA isn’t straightforward. Those who stand to benefit most are those paying basic rate tax before and after retirement. Interestingly, this could also be an attractive saving option for anyone under forty exceeding, or expecting to exceed, the new tapered annual allowance.
“The flexibilities to withdraw the cash early could be attractive to many but it means losing the Government bonus and a further 5%. There’s also a risk that this could result in higher opt-out rates under auto-enrolment and ultimately resulting in less money in UK long term savings.”
Follow us on twitter: @kpmguk #Budget2016
For further information please contact:
Christina Bridge, KPMG Corporate Communications
M: +44(0)778 950 4905
KPMG Press office
Tel: +44 (0)207 694 8773
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a revenue of £1.96 billion in the year ended September 2015. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 174,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
KPMG has launched a state of the art digital platform that enhances your experience and provides improved access to our content and our people, whatever device you are on.