The Treasury Committee has called upon the Government to abolish the Lifetime ISA (LISA) stating that it has received strong criticism over its ‘complexity, its perverse incentives, its lack of complementarity with the pensions saving landscape and its apparent lack of popularity with the industry and pension savers’.
Jonathan Watts-Lay, Director, WEALTH at work, comments; “Instead of ditching the LISA completely, thought should be given to making it the key vehicle to help individuals buy their first home.”
He adds; “The LISA is an ideal option for those saving for a deposit on their first home, due to the guaranteed bonus, so I see no reason why it shouldn’t be a great addition to the workplace benefits package.
In fact, what many employees don’t realise is that saving into a LISA can actually help them to save for a deposit faster than using a savings account, and that by getting into the savings habit, it may also actually increase their pension pot.”
To help with this, WEALTH at work has illustrated how this could work in practice in the example below.