Potential pitfalls of the Lifetime Isa – Royal London
By Kirsten Hastings, 14 Jun 16
To be introduced in the UK in April 2017, the Lifetime Isa (Lisa) is intended to incentivise people to save for their first home, their retirement, or both. But research published by the independent Pensions Policy Institute (PPI), sponsored by Royal London, compares the tax-free savings scheme with its international counterparts and highlights some challenges that may arise.
Early Access: Canadians are able to borrow up to CN$25,000 (£13,761) from their Group Registered Retirement Savings Plan in order to purchase a house. The scheme is not limited to the first home and loans must be paid back within 15 years, starting payments in the second year after the withdrawal.
Eligibility is determined by the pension provider. Overall use of withdrawals is supervised by the Canadian Revenue department.
Those who do not make scheduled repayments must pay income tax on any missed payments in the year in which they failed to make a payment.
Taxation: Group Registered Retirement Savings Plans are Exempt – Exempt – Taxed (EET).
Take up: In 2011, around 1.8 million Canadians were participating in the home buyers plan.
Tags: Australia | Canada | New Zealand | Pension | Royal London | Singapore | Steve Webb | US
