Does anyone think the Lifetime ISA will be scrapped?

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
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MP2609MP2609 Forumite
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edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
Hi Everyone

After reading the article on MSE page earlier this morning, I thought I would just put out this question. Does anyone think they will really consider scrapping the Lifetime ISA?
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Replies

  • MalthusianMalthusian Forumite
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    I thought it would be scrapped from the moment it was introduced. And go the way of PEPs, TESSAs, Child Trust Funds, etc etc.

    It was a sop to George Osborne who wanted to abolish UK pensions completely and replace them with ISAs. He failed, but as a consolation he was allowed to push through the Lifetime ISA, this vestigial thing that doesn't match up with the age limits or incentives of the rest of the system and has a tiny annual limit. The Lifetime ISA is George Osborne's pee-stain on the lamppost of the saving incentives system; it serves absolutely no purpose whatsoever except to say "George woz ere".

    Now that George is no longer a politician and is off playing at editing the Eening Stannar for a Russian oligarch, the Lifetime ISA can safely be abolished.
  • aj23_2aj23_2 Forumite
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    Simply, no.

    And I completely disagree with what Malthusian has said. It's already really helped me in saving money toward a house. So yes, it does serve a purpose. Two, actually.

    It's only come about from mainly Labour MP's I expect who are engaged in jealously politics.
  • AsgharAsghar Forumite
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    The is already a thread started yesterday in the ISA & Tax Free savings sub-forum.

    https://forums.moneysavingexpert.com/showthread.php?t=5873148

    It would be much easier if everyone stuck to one thread.
  • Drp8713Drp8713 Forumite
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    Lets hope not, it is my intention to use it to bridge the 60-68 gap between the S&S ISA/SIPP and DB Scheme.

    Also, mine should be worth £330k by 60 so wouldnt say it was small fry, and somebody starting at 18 could be worth £650k by 60.
  • Angie_BAngie_B Forumite
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    Drp8713 wrote: »
    Lets hope not, it is my intention to use it to bridge the 60-68 gap between the S&S ISA/SIPP and DB Scheme.

    Also, mine should be worth £330k by 60 so wouldnt say it was small fry, and somebody starting at 18 could be worth £650k by 60.
    What assumptions have you made to get to those figures? You can only pay into the LISA until age 50, so the maximum investment (not including returns on said investment) would be £160k if you started investing at 18. You would have to get some pretty amazing returns to reach £650k!
  • greatkingratgreatkingrat Forumite
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    Paying in £4k + £1k bonus every year from 18-49 (32 years) and getting 5% pa growth, you would have £640k at age 60.
  • mije1983mije1983 Forumite
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    Isn't it nearer 7.5% returns rather than 5%? Still not outside the realms of possibility though.

  • AlexlandAlexland Forumite
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    mije1983 wrote: »
    Isn't it nearer 7.5% returns rather than 5%? Still not outside the realms of possibility though.

    Greatkingrat's maths are correct - remember you get an additional 10 years of growth after you can no longer contribute so the original contribution at age 18 is in there for 42 years. Personally, given current market valuations, I plan for around 2% growth above inflation and fees.

    Alex.
  • Angie_BAngie_B Forumite
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    Alexland wrote: »
    Greatkingrat's maths are correct - remember you get an additional 10 years of growth after you can no longer contribute so the original contribution at age 18 is in there for 42 years. Personally, given current market valuations, I plan for around 2% growth above inflation and fees.

    Alex.
    Ah yes, I'd forgotten the extra 10 years of investment after you can no longer add new money. Thanks for clarifying!
  • ValiantSonValiantSon
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    aj23 wrote: »
    Simply, no.

    And I completely disagree with what Malthusian has said. It's already really helped me in saving money toward a house. So yes, it does serve a purpose. Two, actually.

    It's only come about from mainly Labour MP's I expect who are engaged in jealously politics.

    I think you have missed Malthusian's point. They were not saying that nobody had benefitted from LISAs, but rather that the LISA does not make sense in the broader landscape of taxation, pensions, savings and investments.

    I have no idea what you are talking about regarding Labour MPs and, "jealousy politics". LISAs are not only available to one socio-economic class. Some on the Labour benches may criticise the LISA on grounds that it uses tax-payer money to support relatively affluent savers, and that the money could be better spent on funding social housing, but that has nothing to do with jealousy.
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