Pensions - Articles - PLSA comment on the introduction of the LISA

 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 (LISA) 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, these 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.”