Lifetime ISA needs tweaks to make it work for freelancers
When George Osborne introduced the Lifetime ISA, it was heralded as a savings vehicle for freelancers and self employed individuals that would provide them with some of the benefits that their employed counterparts enjoy.
There were a few measures that were announced in response to pleas from freelancing bodies to ensure that independent professionals were not at a significant disadvantage in comparison to those who work for someone else. Given the significant contribution that freelancers are making to the UK economy, it has become increasingly important to ensure that independent professionals are not discouraged from pursuing careers that are vital to the ongoing growth of a number of sectors which rely on their skills and expertise.
However, following this week's Queen's speech, the Association of Independent Professionals and the Self Employed have called for the lifetime ISA to be extended to allow increased maximum annual payments to be made by those who wish to use them.
The introduction of auto-enrolment pensions for employees has thrown a light on the discrepancies between the retirement arrangements for those who work for themselves compared to those who are employed.
This has prompted discussions of the role of the LISA ahead of its introduction in April 2017, with some commentators suggesting that it should be made available to those who are nearing retirement age as well as those under 40 as is currently proposed.
IPSE have advised that they believe that the LISA rules should be changed to allow self employed individuals to withdraw a maximum amount which would not result in a loss of bonuses or interest, as this would provide some degree of security for those who have a fluctuating income.
IPSE are also keen to ensure that self employed individuals are aware of the introduction of LISAs come April next year. Adam Waters, IPSE's policy and external affairs assistant, has urged the government to ensure that the introduction of the LISA is well sign-posted to enable independent professionals to access the best advice to suit their needs.
Speaking on behalf of the trade body, Mr Waters added that he thinks that tweaks to the LISA proposals will be necessary in light of the Queen's speech which failed to outline any plans to include self employed individuals in the National Employment Savings Trust.
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