EXCLUSIVE: 68% of employers believe LISA signals drift from pensions to ISAs

The creation of the Lifetime ISA is the start of a drift from pensions to ISAs, according to 68 per cent of employers surveyed in a new poll by Wealth at Work.

Wealth at Work director Jonathan Watts-lay explained that many see the introduction of the LISA as the “foundation for workplace pension ISAs”.

“However, with concerns that the LISA will compete with workplace pensions and undermine auto-enrolments success in encouraging people to save, should employers be concerned?” he questioned.

“Pensions should, of course, remain an integral part of saving. Yet other choices such as the LISA should not be seen as a threat, as they may in fact encourage employees to develop a savings habit which ultimately could benefit pension savings. After all, the LISA is a great option for those who want to save for a deposit on their first home due to the guaranteed bonus.”

The survey also found that 71 per cent of employers do not think their employees are saving enough for their retirement.

Watts-Lay believes the LISA will be a “great addition” to the different forms of savings vehicles the workplace already offers such as workplace ISAs, share schemes and pensions and may even boost saving.

“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 added.

“However, 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?”

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