Individual Savings Accounts

Department for Work and Pensions written question – answered on 11th May 2016.

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Photo of Julian Knight Julian Knight Conservative, Solihull

To ask the Secretary of State for Work and Pensions, what assessment he has made of the potential effects on auto enrolment of the roll-out of the lifetime ISA.

Photo of Justin Tomlinson Justin Tomlinson Parliamentary Under-Secretary of State (Department for Work and Pensions) (Disabled People)

Automatic enrolment is the cornerstone of this Government’s private pension reforms, normalising pension saving and reversing the decade long decline in pension savings prior to introduction in 2012. It has been a great success to date with over 6 million people enrolled and opt-outs low at around 10 per cent.

The Lifetime ISA is not a part of the pension system but an additional flexible savings product that can complement pension saving but not replace it. Increasing the choice of savings products available, it aims to support the Government’s ambition to encourage a regular savings habit amongst young people and to create a culture of medium and long term saving at different points in people’s lives.

The Budget 2016 Lifetime ISA costing, certified by the OBR, did not anticipate any revenue impact from individuals opting-out of their workplace pensions in order to save into Lifetime ISAs.

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