Pensions  

Savers plan to mix Lisa and pension plans 

Savers plan to mix Lisa and pension plans 

Savers plan to use this year’s Lifetime Isa (Lisa) to boost their saving pot - not as a replacement for their pension, a poll from financial services company True Potential Investor has found.

In a survey among 2,000 individuals aged 18 to 40 carried out by the company, 46 per cent of savers said they plan to save in both their pension and their Lisa.

However it also found only 18 per cent are more likely to use a pension instead of a Lisa for retirement savings, compared to 36 per cent who plan to save into a Lisa instead of a pension.

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True Potential said that the Lisa had already succeeded in engaging people. However it added that employers must be allowed to pay in so that employees who prefer the Lisa don’t miss out on contributions.

David Harrison, True Potential managing partner, said: “Talk of a surge in workplace pension opt outs after the Lifetime ISA’s introduction appear to be overblown. Two thirds of people in our poll plan to carry on paying into their pension and half will take advantage of both products. 

“The UK has a burgeoning savings gap that pensions have failed to address, so it is right that we look for new ways to save.

“The flaw in the Lifetime ISA is that employers are not able to contribute. That would give savers a much better choice but the Lisa will still be popular. At long last we have a savings product that has already succeeded in engaging savers, despite the smear campaign led by the pensions industry and those with vested interests.”

Phil Dauncey, independent financial adviser at Leicester-based Turner Insurance, added: “Our experience indicates that some clients are considering a Lifetime Isa as an additional savings vehicle but not necessarily as an alternative to pension savings.  Anything that encourages savings is to be welcomed.  

“However, the reduced lifetime allowance and the reduced annual pension contribution allowance are pushing some savers to consider all sorts of pension alternatives.  People’s circumstances are different and, as always, we recommend that people read widely and take independent advice where necessary.”