AJ Bell, Hargreaves Lansdown, Nutmeg, The Share Centre and Transact are the only firms offering a stocks and shares version, and few have brand recognition with the general public.
According to Mr Cox, the banking industry’s reluctance to join the market has been a fundamental reason for the low activity. He says: “When people start talking about it, more people will take it up. If you haven’t got the larger Isa providers talking about it, then naturally it’s not getting as much publicity.”
As things stand, only one high street firm, Skipton Building Society, has made the Lisa available to customers, in the form of the cash-only variant. As is the case at AJ Bell, the building society says more recent activity has been promising: Skipton saw 1,500 new cash Lisa accounts opened between Christmas Day and New Year’s Eve. It was unable to disclose total sales since launch, however.
December also saw another cash Lisa launched to market – from savings and investment app Moneybox. Mr Selby believes that it is only a matter of time before the banks start to follow suit.
He says: “Given the demand experienced by providers who have entered the market, it seems inevitable that this will change during 2018. It may well be that lenders focused on the mortgage market simply were not geared up to offer a product with a retirement element.”
Adviser absence
The strict eligibility criteria has created a narrow market for the Lisa. Consumers must be between the ages of 18 and 39, and those intent on using the product for a house purchase must not own an existing property. Investors are also limited to maximum funding of £4,000 each year, which would attract an annual bonus of £1,000, and contributions must cease after age 50.
Perhaps the most significant issue is that consumers must have sufficient disposable income to make the necessary funding.
For advisers used to dealing with wealthier clients, the Lisa can still form part of conversations when assessing financial needs and objectives. But some point out there are flaws that extend beyond the eligibility criteria.
Alasdair Walker, chartered financial planner at Hunter Aitkenhead & Walker, says he rarely recommends the Lisa, other than for clients’ children. “There are design problems such as confusion between first house and retirement planning,” he says.
“These are totally different aims with different risk requirements and timelines, yet a single solution has been designed.”
Further problems exist around the earliest point of access for retirement – age 60 – which is higher than that of personal pension arrangements, even when the rise to age 57 comes into play in 2028.
