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Old Mutual Wealth responds to consultation on Lifetime ISA


We have issued the following media comment on the release of the FCA paper on the rules for the sale of the Lifetime ISA.

Jon GreerJon Greer, pensions expert at Old Mutual Wealth:

“The Lifetime Isa confuses the long term savings landscape and leaves young people uncertain about where to invest.

“However the view that the exit charge is at odds with the FCA’s charge cap is too simplistic. The exit penalties the FCA were concerned about were those levied by providers and schemes which influence a person’s ability to access pension freedoms. The penalty on the Lifetime Isa is an incentive to use the product for what it was intended for – a house purchase or to be accessed from age 60. The 25% early withdrawal charge shares more in common with unauthorised payment tax charges that apply to pensions, rather than the FCA/DWP charge cap.

“While the exit charge may be aiming to drive the right behaviours, it makes the product complicated and damages the Isa ‘brand’. The Lifetime Isa also appears muddled alongside the government’s successful auto-enrolment strategy.

“It is right that firms should have to remind consumers of the exit charge and any other charges, but that doesn’t get the crux of the problem. The Lifetime Isa needs a rethink.

“The paper introduces a ‘Cash Lisa’. This would potentially need additional consumer warnings as using cash-only for a retirement vehicle is highly unlikely to produce good outcomes over the long term.

“In its current guise, the Lifetime Isa will be used primarily to save towards a first home, very few people will use a Lifetime Isa to save for old-age and pensions are still the best retirement savings vehicle for the majority.

“It is interesting that the paper says personal pensions can be accessed from age 58 rather than age 55. This potentially shows the likely direction of what the government will announce from the State Pension Age review.”



For more information contact

Tim Skelton-SmithOld Mutual Wealth02380 916 99807824 145

Notes to editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £118.1 billion in customer investments (as at 30 September 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Quilter Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

The Quilter plc businesses are being re-branded to Quilter over a period of approximately two years:

• The Multi-asset business is now Quilter Investors

• Intrinsic to Quilter Financial Planning

• The private client advisers business is now Quilter Private Client Advisers

• The UK Platform to Quilter Wealth Solutions

• The International business to Quilter International

• The Heritage life assurance business to Quilter Life Assurance

• Quilter Cheviot will retain its name

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.