{"id":123084,"date":"2026-07-17T09:30:00","date_gmt":"2026-07-17T08:30:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=123084"},"modified":"2026-07-17T09:27:13","modified_gmt":"2026-07-17T08:27:13","slug":"the-isa-move-180000-difference-retirement","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/the-isa-move-180000-difference-retirement\/","title":{"rendered":"The ISA Move That Could Make a \u00a3180,000 Difference to Your Retirement"},"content":{"rendered":"\n

The findings come as the Government prepares to reform the Lifetime ISA and replace it with a First-Time Buyer ISA. Full details have not yet been published, but the proposed product is expected to focus on home ownership, leaving pensions as the main vehicle for long-term retirement saving.<\/p>\n\n\n\n

Pension Contributions Could Produce a Larger Retirement Fund<\/strong><\/h2>\n\n\n\n

Standard Life examined the potential outcome for someone who begins working at the age of 22 with a salary of \u00a325,000. A worker making only the minimum automatic enrolment pension contributions could accumulate a retirement fund of approximately \u00a3210,000 by the age of 68.<\/p>\n\n\n\n

According to Standard Life<\/a>, the same person could instead reach around \u00a3390,000 by paying an additional \u00a34,000 <\/strong>into their pension each year between the ages of 22 and 49. That annual amount matches the maximum currently permitted for Lifetime ISA contributions.<\/p>\n\n\n\n

The difference would be about \u00a3180,000 after inflation. The calculation assumes annual investment growth of 5 per cent, salary growth of 3.5 per cent and pension charges of 0.75 per cent. Under existing Lifetime ISA rules<\/strong>, eligible savers can contribute up to \u00a34,000 each tax year until they turn 50. The Government then adds a 25 per cent bonus, meaning a person who saves the full allowance receives an additional \u00a31,000.<\/p>\n\n\n\n

The money can be used towards the purchase of a first home or withdrawn without penalty from the age of 60. Existing rules remain in force while ministers develop the proposed replacement scheme. Standard Life said pensions may offer greater value for many workers because contributions can benefit from income tax relief as well as payments made by employers. Lifetime ISAs <\/a>do not include employer contributions.<\/p>\n\n\n\n

For higher-rate taxpayers, the difference can be larger. A \u00a34,000 Lifetime ISA contribution attracts a \u00a31,000 bonus, creating a total investment of \u00a35,000. By comparison, according to the company\u2019s calculations, a higher-rate taxpayer making a \u00a34,000 net pension contribution<\/strong> would receive \u00a32,666 in tax relief, leaving \u00a36,666 invested.<\/p>\n\n\n\n

\"\"
ISA switch could boost retirement savings \u00a9 Shutterstock<\/em><\/figcaption><\/figure>\n\n\n\n

More than 1.2 Million Lifetime ISA Accounts Remain Open<\/strong><\/h2>\n\n\n\n

Figures obtained by Standard Life through a Freedom of Information request show that more than 1.2 million Lifetime ISA accounts are held across the UK.<\/p>\n\n\n\n

Most contain relatively small balances. The data showed that 1,177,940 accounts held less than \u00a325,000, while only 50 had balances exceeding \u00a3100,000.<\/p>\n\n\n\n

Mike Ambery<\/a>, Retirement Savings Director at Standard Life, said saving for a home and preparing for retirement involved different timescales and investment considerations. He said pensions would, in most cases, remain the more effective option for people saving for later life.<\/p>\n\n\n\n

Ambery also noted that the difference between pension tax relief and the Lifetime ISA bonus may be limited for basic-rate taxpayers<\/strong> early in their careers. Pensions could become more valuable as earnings rise and higher rates of tax relief become available. He added that people considering a Lifetime ISA specifically for retirement might still choose to open one before the rules change. This could provide another option for higher earners who later approach pension contribution limits.<\/p>\n\n\n\n

The Government has not confirmed when the First-Time Buyer ISA will be introduced or precisely how it will operate. Until further details are published, savers can continue contributing under the current Lifetime ISA system.<\/p>\n","protected":false},"excerpt":{"rendered":"

Millions of people saving for retirement could build a pension fund worth around \u00a3180,000 more by redirecting annual Lifetime ISA contributions into a workplace or private pension, according to analysis from Standard Life.<\/p>\n","protected":false},"author":10,"featured_media":123088,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44],"tags":[],"class_list":["post-123084","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/123084","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/comments?post=123084"}],"version-history":[{"count":3,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/123084\/revisions"}],"predecessor-version":[{"id":123090,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/123084\/revisions\/123090"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media\/123088"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media?parent=123084"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/categories?post=123084"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/tags?post=123084"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}