More than a third (38%) of respondents are likely to consider introducing the new lifetime individual savings account (Isa) into their employee remuneration scheme in the future, according to research by law firm Sackers.
The survey of 78 employers, trustees and advisors also found that 84% of respondents want to offer more financial guidance and education support to help employees with the decision making process around pensions.
The research also found that:
- 4% of respondents are already considering offering lifetime Isas within their staff remuneration package.
- More than half (58%) of respondents have no plans to include the lifetime Isa within their benefits package.
- 45% of respondents believe the lifetime Isa will have a negative impact on pensions and retirement saving.
- 95% of respondents feel prevented from offering financial guidance and education.
- 20% of respondents feel they lack the expertise to offer financial guidance, and 41% are worried about the legal risks of doing so.
Lucy Dunbar (pictured), senior associate at Sackers, said: “Given that the lifetime Isa has only been with us for a month, the proportion of employers who may consider it in the future is high.
“What would clearly undermine pension savings is if individuals opt out of their auto-enrolment scheme in favour of a lifetime Isa and lose out on the valuable employer contributions as a result. Therefore, how lifetime Isas might interact with or complement the current auto-enrolment framework, and ensuring individuals understand this, will be key.
“A likely consequence of the lifetime Isa is a greater need for individuals to have access to suitable financial guidance to help them with their savings decisions. The fact that the majority of employers want to offer this guidance is a very positive message, but it is clear the industry needs to do more to break down the barriers to providing clear and effective guidance to pension scheme members.”
