68% would save into the lifetime Isa alongside their pension

paul-waters-hymans-robertson

More than two thirds (68%) of respondents who would consider opening a lifetime individual savings account (Lisa) would save into it alongside their pension, according to research by Hymans Robertson.

Its survey of 1,000 employees under the age of 40 also found that 61% of respondents would open a Lisa, and 23% of these respondents plan to do so as soon as the Lisa becomes available.

The research also found:

  • 57% of respondents view the government bonus as the main attraction of the Lisa, and 36% believe the main pull is the flexibility of being able to use savings towards a first home rather than have it tied up until retirement.
  • 49% of respondents who would consider opening a Lisa would save more money into a pension, and 19% would save more into a Lisa.
  • 41% of respondents who do not plan on opening a Lisa cite the early exit penalty as the reason for not doing so, and 34% prefer to save through a pension to take advantage of the employer contributions.
  • 18% of respondents would re-direct retirement savings into a Lisa.
  • 72% of respondents based in London would open a Lisa, and 37% would do so as soon as the savings vehicle becomes available.

Paul Waters (pictured), partner at Hymans Robertson, said: “We need to move away from looking at pensions and Lisas as competing products. Younger workers don’t see them as an ‘either/or’ decision. They see them as a product that could give a boost to their savings. But they also appreciate the boost to savings [they] get through employer matching contributions in workplace savings.

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“There is a growing disparity in wealth between the generations. Anything that gets younger people into the savings habit should be viewed as a positive.

“We have chronic levels of under-saving in the UK. Post Brexit, the number of UK workers that won’t be able to retire with an adequate income has increased from two thirds to three quarters. The biggest issue we face is that as a nation is that we’re under-saved. We need to restore a savings culture. Any incentives, be they tax relief, government bonuses or employer matching contributions, have to be viewed as a good thing.”