True Potential to offer Lisa it campaigned for

True Potential to offer Lisa it campaigned for

True Potential Investments has promised to offer the new Lifetime Isa from April next year.

The new savings product was unveiled by chancellor George Osborne at the Budget and will include a 25 per cent government top-up on consumer savings up to £4,000 annually.

The firm’s managing director David Harrison said it was a natural next step, having campaigned since 2013 for an enhanced Isa, making the case for a 25 per cent contributions top-up and a higher annual allowance as part of a paper in February.

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The Lisa will be available to all advisers using True Potential’s systems, while consumers will also be able to access it on DIY online investment site True Potential Investor.

Mr Harrison called the Lisa’s introduction “a turning point in the nation’s savings” as it provides a viable alternative to pensions.

“As a provider of both pensions and Isas, we know that Isas are far simpler. They are also much more popular among consumers and having put forward proposals for this type of Isa, it is a natural next step for us to offer it to our customers.

“The challenge for the government now is to integrate the Lifetime Isa into workplace saving schemes, which currently only accommodate pensions,” he added.

Research by the firm, taking in more than 18,000 people over three years, found savers could be more than £34,000 better off with the new Lifetime Isa compared to a pension.

The online investment site’s study showed the average UK saver aged less than 40 already puts 38 per cent more into their Isa compared to their pension.

Various industry stakeholders have indeed warned that the Lifetime Isa is just a prelude to the previously-proposed Pensions Isa and that moves are afoot to kill off pensions as we know them.

However, this has not stopped some providers and platforms looking into how they will meet demand once the product launches - subject to consultation - this time next year, with Hargreaves Lansdown first to confirm such an intention.

Adviser View

Alan Solomons, director of London-based Alpha Investments and Financial Planning Ltd, said he thinks the Lisa is in fact a Trojan Horse paving the way for the end of pensions as we know them.

He said: “I think we should be looking forward to this brave new world. The pensions area will become much simpler as the years go by. For IFAs the benefits of this will not be fully felt for 20 to 30 years or more as we will still have to advise people with the old style pensions.

“A brave government may even take the knife to those to simplify and reduce the states burden.”