Investment - Articles - HMRC figures show Lifetime ISAs under perform in first year

 In September 2016, the Treasury published an ‘impact assessment’ for the legislation which introduced the Lifetime ISA (LISA) which can be found here:

 It shows that the Treasury was expecting that 200,000 people would open a LISA in the first year of operation and that the average amount saved would be £3,500. 

 But new figures published by HMRC show that take up of the LISA has fallen well short. Rather than 200,000 accounts being opened, only 166,000 have been taken out, and rather than an average subscription of £3,500, the average amount contributed is £3,114.

 Overall this means that ISA inflows are around £180m down on expectations.

 Commenting, Steve Webb, Director of Policy at Royal London said: “The Lifetime ISA is a complex product which seeks to combine elements of the Help to Buy ISA with long-term pension saving. It seems that this complexity, plus a lack of providers in the market, has combined to produce a disappointing first year for the LISA. There is a strong case for the government to think again about whether setting up a rival product to the workplace pension is really the best way to help younger people save for the long term”.