Four in ten employers plan to offer Lifetime Isa
A survey by WEALTH at Work, a provider of financial education, has found that 42 per cent of employers are planning to provide employees with access to the Lifetime Isa, which will be launched on 6 April.
The Lifetime Isa is designed for designed for those under the age of 40 to save for a home or for retirement; they will be able to put away up to £4,000 a year in a tax-efficient cash or stock market account, with an additional 25 per cent bonus from the government.
One concern has been the risk that people who use the Lifetime Isa as a retirement savings vehicle will lose out on employer pension contributions. A potential solution to this issue would be for employers themselves to make a Lifetime Isa available as part of the package of savings options.
WEALTH at Work conducted a survey of employers; 42 per cent of those who responded indicated they will be offering a Lifetime Isa option as part of their rewards package. However, the survey sample was a small and self-selecting one, comprising 50 responses from a website poll.
Jonathan Watts-Lay, Director, WEALTH at work, comments: ‘As we know, the workplace already supports employees with various savings vehicles to help them with their short, medium and long term savings goals.
‘This includes workplace Isas, share schemes and pensions. Such variety allows employees to choose a savings method, or a combination of methods, which are the most appropriate for them at a given point in time, so I see no reason why the Lisa wouldn’t be a great addition.
He continues: ‘Employers will need to think about how they can support employees who all want to save in different ways. For example, we already see many companies giving employees a percentage of their salary to buy “benefits” so could this be a method of funding the Lisa in the future?’
However, for investors who want to open a Lifetime Isa independently of their employer, there is likely to be little choice when it launches in April. Banks and the vast majority of online brokers are so far shying away from offering the new Isa.