Pensions take second place

Samantha Downes

Samantha Downes

In a week that witnessed the dissolution of parliament, local elections, and the retirement of the Duke of Edinburgh it would have been pretty easy to have missed one of the most interesting developments of the last seven days.

I write slightly tongue-in-cheek but that’s because this is a financial newspaper written for advisers, the majority of whom will be advising clients on some form of retirement planning.

Anyway this development I write of is the results of a survey carried out by Met Life which revealed how savers under 40 are already looking at reducing their pension contributions in favour of saving into a Lifetime Isa.

Met Life found that nearly one in three under-40s will cut the amount they invest into their pensions or leave workplace pensions in order to concentrate on saving into Lifetime Isas.

Its nationwide study of 1,071 employed adults aged 18-plus between 30 January and 2 February this year Met Life found 23 per cent will reduce pension contributions in favour of Lisas.

It’s what we journalists might call a bit of a NSS story; I will let you - who are far more intelligent than I - work out what those initials stand for [FYI the saying was a well-used one by one of our more charismatic former editors i.e. not myself].

Of course the under 40s are going to swap their savings into something that doesn’t require locking them up out of reach for decades. Especially when house prices are now so ridiculously high that the only people who can afford to buy them are pensioners.

I am not a fan of the Lisa; a pension is still the best way to save for retirement, but think about it, having a roof over your head, preferably one you own, is a more pressing need than that of saving up for a world cruise or a lifetime golf club membership. If we are to take on board the theories of the psychologist Maslow - and in particular his  hierachy of needs, then buying a home will always supersede that of a pension. End of.