Whilst the Budget announcement was constrained by George Osborne’s political aspirations there were a few notable changes that will affect the Lifetime Savings industry.
The Lifetime ISA is an obvious forerunner of Pensions ISAs. It feels very much like a half-way house solution after pulling the possibility of the full blown changes that George Osborne had originally planned to introduce. The new Lifetime ISA is an addition to the current pensions landscape as it stands however it has been suggested that within this Parliament we could see it replace the existing pensions regime for, at least, DC/money purchase schemes. This does also raise the question about the future of auto-enrolment and how that might be impacted by Lifetime ISAs.
Various changes have also been announced in order to tidy up the tax legislation following the pension freedoms that came into force in April 2015. This includes the payment of benefits to those in serious ill health, to dependents who reach age 23 whilst receiving a dependents pension, and for those with pensions savings up to £30,000.