{"id":388704,"date":"2026-03-17T00:03:08","date_gmt":"2026-03-17T00:03:08","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/388704\/"},"modified":"2026-03-17T00:03:08","modified_gmt":"2026-03-17T00:03:08","slug":"lifetime-isa-changes-spark-concern-for-vulnerable-retirement-savings","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/388704\/","title":{"rendered":"Lifetime ISA changes spark concern for ‘vulnerable’ retirement savings"},"content":{"rendered":"

The Treasury\u2019s decision to phase out lifetime ISAs in favour of a product focused solely on first-time property buyers has raised concerns among Britain\u2019s self-employed workers. <\/p>\n

Announced in the November Budget, the Government confirmed that a \u201cnew, simpler\u201d ISA will replace the existing lifetime ISA scheme.<\/p>\n

Reports suggest the new product could launch in 2028.<\/p>\n

Critics warn the move may leave many independent workers without a straightforward savings option that currently offers a 25 per cent Government bonus on contributions.<\/p>\n

Lifetime ISAs were introduced in 2017 and have grown significantly in popularity.<\/p>\n

The number of active accounts increased by around 45 per cent over the past two years to reach roughly 964,000.<\/p>\n

Around 45 per cent of account holders are believed to use the savings product primarily to build retirement funds rather than to purchase property.<\/p>\n

Concerns about the policy change came as retirement savings among Britain\u2019s self-employed remain significantly lower than among employed workers.<\/p>\n

The UK has an estimated 4.25 million self-employed people.<\/p>\n

However, only one-in-five contributes to a pension scheme.<\/p>\n

\"Saver\"\/<\/p>\n

Millions risk losing a key retirement savings option under new ISA plans<\/p>\n

| <\/p>\n

GETTY<\/p>\n

By comparison, automatic enrolment has pushed pension participation among employees to almost 90 per cent.<\/p>\n

Data from Hargreaves Lansdown highlights the gap in accumulated retirement wealth.<\/p>\n

The typical employed worker has pension savings of around \u00a386,700.<\/p>\n

Self-employed workers have average pension savings of approximately \u00a326,500.<\/p>\n

The company\u2019s savings and resilience barometer suggests that only 36 per cent of self-employed households are on track for an adequate retirement income.<\/p>\n

This compares with 46 per cent of households in traditional employment.<\/p>\n

\"ISA\"\/<\/p>\n

Industry figures have warned the proposed ISA changes could remove one of the few straightforward options available<\/p>\n

| GETTY<\/p>\n

Without workplace pension schemes or employer contributions, many independent workers rely on alternative savings products to prepare for retirement.<\/p>\n

Rachel Vahey, head of public policy at AJ Bell, said: “By only focusing on helping those buying a house, the Government is leaving fewer options for those who might use a lifetime Isa to save for retirement.”<\/p>\n

She added that while existing account holders will still be able to continue saving, “that doesn’t help the thousands of people who need a solution in the future”. <\/p>\n

Maike Currie, Vice President of Personal Finance at PensionBee, criticised repeated changes to long-term savings products.<\/p>\n

“Constant tinkering with savings products undermines confidence and discourages people from planning ahead.”<\/p>\n

Alistair McQueen, head of retirement and savings at Aviva, warned: “Without auto-enrolment or employer contributions to fall back on, many self-employed workers risk reaching later life without the savings they’ll need.”<\/p>\n

The Pensions Commission is expected to publish an interim report in the coming weeks that could include proposals aimed at addressing the savings gap among the self-employed.<\/p>\n

Emilia Farr, a 40-year-old IT worker from London, has built up \u00a376,000 in her lifetime ISA since 2017.<\/p>\n

She said: “For me, opening one was a no-brainer.<\/p>\n

\"Saver\"\/<\/p>\n

For some savers, the proposed changes have introduced uncertainty about the future of their retirement planning<\/p>\n

| <\/p>\n

GETTY<\/p>\n

“I treat it like a pension, and the Government bonus is a real incentive to save.<\/p>\n

“If you’re employed, even if you do nothing, you have a pension but it’s very different for the self-employed.”<\/p>\n

Laura Tilt, a 43-year-old dietician from Bristol, who has saved \u00a340,000 in her account, expressed similar views.<\/p>\n

She said: “I realised that no one was coming to save me and I really needed to get started.”<\/p>\n

Both savers said they hope they will be able to continue using their accounts after the replacement scheme is introduced.<\/p>\n","protected":false},"excerpt":{"rendered":"The Treasury\u2019s decision to phase out lifetime ISAs in favour of a product focused solely on first-time property…\n","protected":false},"author":2,"featured_media":388705,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[177],"tags":[79,18,19,17,55535,825,5,2090,234,235,3888,63657],"class_list":["post-388704","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-eire","tag-ie","tag-ireland","tag-isa","tag-money","tag-news","tag-pensions","tag-personal-finance","tag-personalfinance","tag-savings","tag-sgg"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116241590026820733","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/388704","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=388704"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/388704\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/388705"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=388704"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=388704"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=388704"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}