The Government is coming under growing pressure to postpone the launch of the much talked about Lifetime ISA amid concerns that there are too many unanswered questions about the product.
These ambiguities have been troubling providers for a while, but it is thought that the destabilising effect of Brexit has increased pressure for the Treasury to delay its proposals.
Steve Cameron, from Aegon, said: “Until we have answers to [these questions] we really can’t move forward.
“We’ve been saying for some time that unless we have these details very soon there won’t be time for providers to build the products and for the Financial Conduct Authority (FCA) to put in place the necessary regulation.
“It is a case of getting the details very quickly, keeping it simple so the market can get to work, or defer and cancel the whole thing. We need the detail by the end of July, if we have to wait until Parliament returns from recess that becomes unfeasible.”
The pleas follow a particularly stern rebuke from former Pensions Minister Ros Altmann, who believes plans for the ISA should be dropped altogether.
In an interview earlier this month, the Peer said: “I would love to see the Lifetime ISA scrapped. The Lifetime ISA is by definition not going to last a lifetime because it’s an ISA, and because you can get the tax-free money too soon.
“A pension is meant to provide money lasting into your eighties. Instead of using it as a proxy pension for very well-off people, who perhaps have already filled their pension allowance, why don’t we just use it for house purchase if that is what is required and for helping people onto the housing ladder, and keep pensions as pensions. They’re not ISAs, and they shouldn’t be ISAs.”
A Treasury spokeswoman has maintained the proposals will give people more “freedom and choice.”
For further advice on retirement planning and the new Lifetime ISA, please contact the expert team at Birchwood today.