UK Government adopts IFoA’s recommendation to drop exit penalty on Lifetime ISAs

Last month the Institute and Faculty of Actuaries (IFoA) wrote to the UK government to suggest a range of measures that would allow the insurance and finance sectors to respond more effectively to COVID-19. One of the measures in the letter proposed that the rules on Lifetime ISAs could be relaxed for a period of time. This would allow consumers to access money from these vehicles without ending up worse off.

The IFoA argued that this could be achieved by changing the exit penalty from 25 per cent to 20 per cent. This meant the account holder would only pay back any government bonus received and not the additional withdrawal charge of 5 per cent.

On Friday 1st May, in line with the IFoA’s suggestion, HM Treasury announced a temporary rule dropping the charge on unauthorised withdrawals to 20 per cent for the period between March 6 2020 and April 5 2021.

~ENDS~

Contact
Sonia Sequeira, Media Relations Manager, IFoA
Tel: 07525 592 198
Email: sonia.sequeira@actuaries.org.uk

Notes to Editor

1. IFoA letter to Jim Harra, First Permanent Secretary and Chief Executive, HMRC. 16 April 2020.

About the Institute and Faculty of Actuaries

The Institute and Faculty of Actuaries (IFoA) is a royal chartered, not-for-profit, professional body.

Research undertaken by the IFoA is not commercial.  As a learned society, research helps us to fulfil our royal charter requirements to further actuarial science and serve the public interest. 

Actuaries provide commercial, financial and prudential advice on the management of a business’s assets and liabilities, especially where long term management and planning are critical to the success of any business venture. They also advise individuals, and advise on social and public interest issues.

Members of the IFoA have a statutory role in the supervision of pension funds and life insurance companies. They also have a statutory role to provide actuarial opinions for managing agents at Lloyd’s of London.

Members are governed by the Institute and Faculty of Actuaries. A rigorous examination system is supported by a programme of continuing professional development and a professional code of conduct supports high standards reflecting the significant role of actuaries in society.

The IFoA is available to provide independent expert comment to the media on a range of actuarial-related issues, including enterprise risk management, finance and investment, general insurance, health and care, life assurance, mortality, and pensions.