The Chancellor has now given his 2016 Budget speech – and once again there appears to be a major surprise for employee benefits and workplace savings.
The supporting Budget document includes the following: “Launching a new flexible Lifetime ISA for under 40s in which people can save up to £4,000 each year and receive an additional 25% bonus from government. Savings, including the government bonus, can be accessed to buy a first home and in retirement.”
This would appear to be an alternative to pension savings for younger workers – and perhaps therefore a way of side-stepping the more difficult option(s) of changing the existing system. It may also be an indicator as to future changes to the entire savings system once the EU referendum decision is resolved.
At the time of writing we am unclear what, if anything, this will directly mean for the world of existing workplace savings. This is something that we will consider and our further thoughts will follow once we have seen the detail of the proposals.
What is clear though is that this change – together with the already announced Help to Save scheme – will only serve to further complicate the savings landscape for many employees. So the need for financial education in the workplace is ever more evident.
Further thoughts on this topic will be shown on this blog once more detail is known.
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