Few providers will have a Lifetime Isa ready by the April 2017 launch date, because the government has not provided the regulatory guidance in enough time, according to Nucleus.
Speaking to FTAdviser, the platform’s product technical manager Jon Gwinnett said that while they intend to offer a Lisa “eventually”, there is simply not sufficient time to have it ready by April.
“Until the technical specifications are published, and HM Treasury and HM Revenue & Customs iron out the wrinkles, it’s very difficult to commit to a launch next April,” he said, suggesting Nucleus would take “a more considered approach”.
Since the then chancellor George Osborne announced the policy in his March budget, proposed specifications have become increasingly complicated, making it even more difficult to have a fully compliant product ready by the launch date, said Mr Gwinnett, adding it was “unlikely a huge number of players” would have a product then.
However, he said advisers had expressed considerable interest in the Lisa, particularly from the perspective of parents wishing to set one up for their children.
Mr Gwinnett predicted intergenerational transfer of wealth would be a major market for the new Isa.
Hargreaves Lansdown was one of the first firms to pledged Lisa readiness by next April. The firm’s head of pensions research Tom McPhail told FTAdviser the dramatic political upheaval of recent weeks has not changed this.
“We’ve spoken to Treasury, and while we know the final decisions [over specifications] have not been made, we’re confident we can have our product ready by April.”
He added though, that this confidence was based on the assumption that the final specifications would not include any unexpected complexities.
Mr McPhail also expected banks to have a product ready by that date. Recent uncertainty aside, he added there was “no reason” to delay the launch of the Lisa.
Mr Gwinnett previously stated many platforms could show the Lisa a cold shoulder, as the product’s features will make it extremely complicated to build and administer, meaning a lot of work for fairly low inflows.
Available only to those under 40, with more generous terms and much more flexibility than traditional savings products, the Lisa is designed to get young people saving, with 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.
james.fernyhough@ft.com
