UK pensions: lifetime Isa shake-up raises fears for self-employed

You can pay in up to £4,000 each year into a lifetime Isa until you are 50. The government then adds a 25% bonus to your savings, up to a maximum of £1,000 a year. Photograph: 57stock/Alamy

Emilia Farr opened a lifetime Isa when the accounts went on sale in 2017 as a way to save for her retirement. But having built up a pot of £76,000, the self-employed IT worker was shocked to hear that the accounts are being pensioned off.

“For me, [opening one] was a no-brainer. I treat it like a pension, and the government bonus is a real incentive to save,” says Farr, 40, who lives in London.

She adds: “If you’re employed, even if you do nothing, you have a pension – but it’s very different for the self-employed.”

Lifetime Isas have proved to be a hit with millennials and generation Z: the number of “live” accounts has jumped by 45% in two years and now stands at almost a million (an estimated 964,000 in 2023-24, according to the most recent official data).