The Pensions and Lifetime Savings Association today commented on the introduction of the new Lifetime ISA which is due to become available from tomorrow.
Nigel Peaple, deputy director defined contribution, lifetime savings and research, Pensions and Lifetime Savings Association, said:
“According to our survey, unprompted awareness of the Lifetime ISA among 18-39 year olds is low at 23%. Where respondents say they are likely to start saving in a LISA, 42% say they will use it primarily to buy a property and 40% primarily for retirement.
“Worryingly, 40% of 18-39 year olds who are already paying into a workplace pension say that if they start saving in a LISA they will stop saving into their pension. If this were to happen, some savers could miss out on up to two decades of employer contributions, making it even harder for them to save adequately for retirement.
“While the LISA can be the right choice of retirement saving product for some groups in the workplace, such as the self-employed, overall we do not believe the LISA should be used as a replacement for a workplace pension. The LISA does not provide the strong governance commonplace in a workplace pension, nor the value for money ensured by the charge cap, nor a default fund designed to meet member needs. Crucially, unlike workplace pensions, the LISA does not benefit from mandatory employer contributions.
“On the other hand, the Lifetime ISA does look like a good financial product for first time buyers who are saving for a deposit to buy a house.”
NOTES TO EDITORS:
THE PENSIONS AND LIFETIME SAVINGS ASSOCIATION
We’re the Pensions and Lifetime Savings Association; the national association with a ninety year history of helping pension professionals run better pension schemes. Our members include over 1,300 pension schemes with 20 million members and £1 trillion in assets, and over 400 businesses. They make us the voice for pensions and lifetime savings in Westminster, Whitehall and Brussels.
Our purpose is simple: to help everyone to achieve a better income in retirement. We work to get more money into retirement savings, to get more value out of those savings and to build the confidence and understanding of savers.
Lee Blackwell, Head of Media & PR, Pensions and Lifetime Savings Association
T: 020 7601 1726, M: 07713 073 023, E: [email protected]
Babak Mayamey, PR Manager, Pensions and Lifetime Savings Association
T: 020 7601 1718, M: 07825 171 446, E: [email protected]
Kathryn Mortimer, Press Officer, Pensions and Lifetime Savings Association
T: 020 7601 1748, M: 07901 007 713, E: [email protected]
The PLSA commissioned ICM Unlimited to conduct a consumer poll of 18-39 year olds in Britain. ICM Research interviewed 895 British adults aged between 18-35 online between 31st March and 2nd April 2017. Data were weighted by region, gender, age and socio-economic grade to be representative of all British adults aged 18-39.
Unprompted awareness – respondents were asked “are you aware of any new government backed financial products for saving being launched in April 2017?” without any reference being made to the Lifetime ISA. Those who said yes were asked if the product they had been thinking about was the LISA. Where respondents said that it was the LISA they had been aware of they are regarded as having an unprompted awareness of the LISA.