The Government is to launch a consultation on the future of the Lifetime ISA (LISA) in early 2026, according to documents from yesterday’s Budget report.

It is planning on “the implementation of a new, simpler ISA product to support first time buyers” and ultimately replacing the LISA.

Dan Coatsworth, head of markets at AJ Bell, said the plans to scrap the LISA could leave some self-employed pension savers needing to change their retirement saving plans.

He said: “Those using the account for retirement savings will want to know if they’re stuck in a legacy account, or if they are able to transfer to a different account. Through this consultation process, the government needs to make sure consumers come first and that the number one priority is for existing Lifetime ISA customers to get a good outcome.

“It also presents a challenge for self-employed people who use it as a retirement savings vehicle. The self-employed miss out on auto-enrolment and so the Government should be doing more to encourage those in this group to put away as much money as they can for later life.”

Maike Currie, VP of personal finance at PensionBee, said the consultation issues a clear signal for those using the LISA for retirement planning.

She said: “This change carries an important signal for millions of self-employed savers who have used the LISA as a flexible retirement vehicle: pensions remain the UK’s only durable, purpose-built long-term savings product. For anyone saving for retirement, pensions offer the stability, tax relief and regulatory protection that ISAs cannot match.”