Hargreaves Lisa bonuses hit £50m

Hargreaves Lisa bonuses hit £50m

Bonuses paid out on Lifetime Isas provided by Hargreaves Lansdown have hit £50m, despite concerns from MPs earlier this year the government scheme was unpopular with savers.

Since the platform launched its Lisa in April 2017 more than 50,000 accounts were opened, with bonuses reaching the £50m milestone earlier this month.

The Lisa was introduced in April last year offering a 25 per cent government bonus to savers wishing to save for retirement or buy a first home.

Only savers aged between 18 and 39 are eligible to open a Lisa, which received the bonus of up to £4,000 a year.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said the bonuses have given a "leg-up" to first-time buyers onto the property ladder.

She said: "Lisas are already making a huge difference to people saving hard for their first home.

"With the £4,000 annual allowance, the government offers up to £1,000 of free money each year.

"And there’s every sign that savers are making the most of their allowances: government figures show that in the first year, the average Lisa held £3,114, so the average bonus was £778.50."

In July the Treasury select committee called for the abolition of the Lisa, claiming it was too complex and offered "perverse incentives" inconsistent with other parts of the long-term savings landscape.   

The MPs argued there was little evidence tax relief was an effective way of encouraging potentially vulnerable households to save for the future.

Despite this scepticism no changes were made to the Lisa in the Autumn Budget.