Lifetime ISA savers could face higher charges
16th June 2016
Savers looking to use the lifetime ISA (LISA) could be faced with higher charges, reducing the value of their pots by 13%, according to analysis by the Pensions Policy Institute (PPI).
The Financial Conduct Authority recently announced plans to cap exit charges on new pensions and limit penalties on policies to 1%.
The LISA will not be regulated in the same way, so individuals withdrawing money for any reason other than to buy a first home will be at risk of higher charges.
From April 2017, the LISA will be available for adults aged 18 - 40. Savers can contribute up to £4,000 per year and will receive a 25% government bonus.
Individuals accessing their pot before the aged 60 will forfeit the bonus and be subjected to a 25% exit charge – unless money is withdrawn to purchase a first home worth up to £450,000.
Contact us today to discuss retirement planning.