Government urged to improve Lifetime ISA provision for the self-employed
An organisation representing the UK’s self-employed workforce has called on government to reform the Lifetime ISA saving scheme to protect the future of the nation’s freelancers.
The call, from the Association of Independent Professionals and the Self Employed (IPSE), came in response to fresh findings from consumer watchdog Which? that revealed people aged 20 needed to set aside at least £131 each month to have a sufficiently comfortable retirement.
The study also claimed those waiting until aged 50 to begin saving would need to save 633 a month to retire comfortably.
Launched in April 2017 as an alternative to a pension scheme, the Lifetime ISA can be used as a retirement saving pot. Owner’s can deposit up to 4, 000 each year, with a maximum annual interest return of 1, 000.
The Lifetime ISA is only available to people under the age of 40, and cannot be accessed until the owner’s 60th birthday. All money taken out of the Lifetime ISA for retirement is tax free.
An official IPSE statement expressed the need to increase age eligibility of the Lifetime ISA to support older workers, and highlighted the government’s responsibility to providing an auto-enrolment solution? for the self-employed to encourage pension savings.
‘saving for retirement is crucial for everyone, but putting money aside is particularly difficult if you’re self-employed, said IPSE policy development manager Jordan Marshall.
your income is volatile, and you need to have a buffer to offset periods when business is quiet or for other business costs such as accountancy, marketing and equipment.
According to IPSE research, 17 per cent of self-employed workers in Britain had no retirement savings whatsoever, while almost four in ten freelancers felt it was impossible to make any regular savings.
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.
Almost three-quarters of UK employees believe they are facing a more stressful retirement than their parents, with one in five thirty-somethings said to be struggling with both immediate and long-term finances. more»