skip to main content
13th
Apr 2016
/

Will the Lifetime ISA be vital for self-employed workers?

Will the Lifetime ISA be vital for self-employed workers?

Will the Lifetime ISA provide the key pensions saving tool for those who don't benefit from auto-enrolment and employer pension contributions?

Will the Lifetime ISA be vital for self-employed workers?

Announced by the Chancellor in the March 2016 Budget Report, the Lifetime ISA is a new savings tool designed to allow individuals to save simultaneously for their first home and their retirement. Aimed at everyone aged between 18 and 40 years old, it may however prove most popular among the self-employed.

While employed workers are now automatically enrolled into workplace pension schemes which also benefit from contributions from the employer, freelancers and the self-employed are largely left to fend for themselves when it comes to preparing for their retirement. While there are a range of personal private pension plans available to self-employed people they may prove unpopular among some workers who feel they need a more flexible way to save for retirement, in case they endure times of slow business or want to take money from their pension pot to expand their business, the Lifetime ISA then could prove crucial to the self-employed.

From the product launch next year, savers will be able to save up to £4,000 a year in a lifetime ISA. In addition to having the benefits of a regular Cash or Investment ISA, savers could receive a 25% boost from the government on top of their savings if withdrawn after the account holder's 60th birthday or when the money is used to purchase their first home.

The key factor that could give Lifetime ISAs the edge over other pension plans is that while private pension schemes do not permit savers to make withdrawals before they turn 55, with a Lifetime ISA savers will be able to make withdrawals from the account at any time they need access to their cash. They will however lose the bonus and incur a 5% charge on the amount withdrawn, which can be recontrbiuted later providing they do not exceed their annual ISA contribution limit.

This means a saver who waits until their 60th birthday could earn an extra £1 for every £4 they contributed before their 50th birthday (to a maximum of £32,000). In addition to the government bonus they will still benefit from any interest or investment growth that accumulated on the account and they can withdraw it all tax-free, unlike many pension schemes which only allow up to the first 25% to be taken out without tax.

To find out more about Lifetime ISAs click here: 

High Income ISAs

High income ISA ideas:

ISAs Products

Cash ISAs

Fixed Rate & Instant Access ISAs:

Cash ISAs: 

Stocks & Shares ISAs

Types of Stocks and Shares ISA include: 

Stocks and Shares ISAs

Latest News

Income ISA offers up to 7.60% pa paid quarterly

9th October 2017

Inflation reached as high as 2.9% in August as reported by the Office for National Statistics (ONS). As a result, many individuals are looking for ways to receive more income to combat the effect of rising inflation. 

Newsletter Signup

Sign up to our Newsletter to get exclusive news and offers direct to your inbox.

About us

ISA.co.uk is a trading style of Fair Investment Company.

We've been comparing and recommending ISAs for many years so you can trust you're in good hands.

About us

4.89 Average

35 Reviews

Paul

Very informative, find myself a good ISA account with best return in terms of interest.

Anonymous

Easy to navigate, all required information was to hand. Professional looking site!

Jessica Esa

ISA.co.uk has a really attractive and simplistic design. I've found it easier to use than other similar comparison sites. The products are simply described, it's informative and the pros and cons are really clear. Great website.

Sue

Easy to use website and up to date. Saved the link on my tablet.

Rob Holden

The website was very useful and informative.

Andrew Johnson

ISA can be confusing at first and this site includes a useful and helpful introduction into the world of ISAs

Crowd2Fund

Excellent website - clear and helpful information about different products - and a trustworthy partner.

Anonymous

Quick and professional service provided

Anonymous

Very insightful and easy to navigate.. would recommend to anyone interested

Helen Belcher

Clear concise information that was easy to understand!

Sue

Easy to use website and up to date. Saved the link on my tablet.

Adam

simple, informative and clear - found what I was looking for straight away. Thank you.

Steve

Really simple to use and all the information was clear with lots of products available. The interest calculator was really handy too. Have bookmarked and will definitely use again.

Marion

Very helpful site for my investment isa

Hannah Gordon

This was a really user-friendly site, and was very helpful when it came to comparing accounts and choosing my 2016 ISA.

Sue

Easy to use website and up to date. Saved the link on my tablet.

Anonymous

If you wish to invest in an ISA this site has it all. A super comprehensive range of simply explained products from all the major companies.

Cristina Iacob

Very knowledgeble company with an extensive range of services, a great website with loads of useful information.

Jessica Morley

Really informative and easy to use site. Information is laid out very clearly and comparisons have all the plus & minuses I'm interested in, so makes me feel like I am making an informed decision. There was also a lot of additional information which would be incredibly helpful to someone completely new to ISAs who wanted to read up on the basics.

Sam H

excellent website, helped me to understand how i can get started with ISA's and helped me to narrow down great deals!

Anonymous

Nice graphics and easy to navigate