InvestmentsMar 17 2016

Hargreaves among first to confirm Lifetime Isa interest

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Hargreaves among first to confirm Lifetime Isa interest

Hargreaves Lansdown is among the first to confirm it will offer the Lifetime Isa when it is launched next year.

The new savings vehicle was announced by chancellor George Osborne at yesterday’s (16 March) Budget and will be launched in April 2017.

Danny Cox, a Chartered financial planner at the Bristol-based company, said: “The devil is in the detail, but it is absolutely something we are interested in offering. There will be demand from investors.

“As a concept it is really exciting and it gives people the opportunity, particularly those under 40, to get into the savings habit.”

Aldermore, which already offer’s the government’s Help to Buy: Isa, has said it is also looking into whether it will offer the Lifetime Isa.

Simon Healy, managing director for savings at Aldermore, said: “There is understandable concern that younger people do not have the means or incentive in today’s low interest rate environment to save for a rainy day or for goals such as a deposit for their first home.

“The take up of the Help to Buy Isa proves that younger savers will put money away if they’re rewarded and I suspect the Lifetime Isa will be just as popular.”

Meanwhile, Nationwide said it welcomes ideas that foster an enduring savings culture and added that it looks forward to hearing more details on the Lifetime Isa.

A spokesman for Lloyds Banking Group said it is too early to say whether it would offer the Lifetime Isa.

Virgin Money have confirmed they will be offering the Lifetime Isa from launch while a Barclays spokesman said it is waiting for more details.

Other providers which also offer the Help to Buy Isa - including Barclays, Santander, Clydesdale Bank, NatWest and Royal Bank of Scotland - have also been asked whether they would offer the Lifetime Isa, but did not respond.

Standard Life today (17 March) committed to offering the Lifetime Isa on its wrap and has begun analysis on how it can be integrated into the platform.

David Tiller, head of adviser propositions and strategy at Standard Life, said: “The introduction of the new Lifetime Isa opens up new options for younger investors, so it’s vital we make it available to advisers when considering financial solutions for these clients.

“It is clear that the pace of change in our market is not slowing, and we also know more choice can lead to greater complexity, which increases the need for advice.

“Platforms need to keep pace with this change so we are realigning our development programme to meet these emerging demands.”

An Aegon spokesman said: “We believe the Lifetime Isa will prove popular with younger savers.

“As a leading provider of retirement and long term savings products we expect to offer it and see it as one of a range of options young people use to prepare for retirement.”

The Lifetime Isa, for those under 40, offers a 25 per cent government bonus to savers using their pot to buy their own home or save for retirement.

Savers who invest in the new Isa must wait until they are 60 to use it for retirement, or can withdraw the funds at any time to buy a home up to a purchase value of £450,000.

But early withdrawal, unless within specific criteria, will mean savers are hit with a hefty 5 per cent penalty, the loss of the 25 per cent bonus and interest accrued.