Anger as Gov­ern­ment ig­nores call to dump the Life­time ISA

Western Mail - - BUSINESS WALES -

IT IS “dis­ap­point­ing” that the UK Gov­ern­ment has ig­nored calls for the Life­time Isa to be scrapped, the chair­woman of a pow­er­ful com­mit­tee of MPs has said.

Nicky Mor­gan, who chairs the Trea­sury Com­mit­tee, also said the Trea­sury had not demon­strated an in­creased sense of ur­gency needed in some key ar­eas of house­holds’ fi­nances which had been iden­ti­fied by the com­mit­tee.

She made the com­ments as the com­mit­tee re­leased the Gov­ern­ment’s re­sponse to the com­mit­tee’s House­hold Fi­nances re­port pub­lished in July, which had said hard-pressed house­holds need more help to deal with debts and save.

The Trea­sury Com­mit­tee had called for the Life­time Isa to be scrapped due to its “per­verse in­cen­tives and com­plex­ity”.

Life­time Isas al­lows peo­ple to save for their first home or their pen­sion in one pot.

But con­cerns were pre­vi­ously raised that savers could be dis­cour­aged from sav­ing into a work­place pen­sion, where they also get the ben­e­fit of em­ployer con­tri­bu­tions.

Crit­ics also ar­gue that a first home and a retirement are sep­a­rate goals which should not be lumped into one sav­ings ve­hi­cle.

Com­ment­ing on the Gov­ern­ment’s re­sponse, Ms Mor­gan said: “The com­mit­tee ex­pressed con­cern about the com­plex­ity and per­verse in­cen­tives of the Life­time Isa.

“It is dis­ap­point­ing, there­fore, that the Gov­ern­ment ig­nored the com­mit­tee’s call for the Life­time Isa to be abol­ished, and will press on with­out re­form.”

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