High street firms shun government savings programme

Poor LISA. She’s all dolled up, ready to make her entrance onto the national stage and nobody wants her. She’s the girl at the dance who sits on her own, unloved and ignored. Today marks the launch of the Lifetime ISA, the government’s flagship savings programme. The LISA is a version of the Individual Savings Account, intended to help first-time buyers and those saving for retirement. It works like this: for every £1,000 saved, the government provides a £250 top-up. People can make annual contributions up to £4,000. Anyone aged between 18 and 39 is eligible, with a cut-off age for contributions of 50. The maximum government bonus is £32,000 and the money has to be used towards a deposit for a first home, or can be accessed from age 60. Critics say the new product is too complicated, has onerous charges and risks encouraging people to shun pension saving – which is more tax efficient as pensions attract tax relief as well as employer contributions.