Scottish Friendly has today warned that the financial services industry is in torpor over the Lifetime ISA (Lisa). The Glasgow based financial mutual, which is one of just a handful of providers to actively support the introduction of the product, says the financial services industry needs to wake up and do more to embrace and promote the new investment.
The call comes following the results of research undertaken on behalf of Scottish Friendly into the current public perception of the Lisa. The findings highlighted worrying trends around understanding and awareness of the product. Less than one in three adults (31%) have even heard that the Lifetime ISA is being introduced in April and awareness is lowest (16%) amongst the 18-25 year old age group – a key audience for the Lisa which has a maximum age limit of 40 for new applicants.
The research also highlighted the general lack of understanding of the details of the Lisa. Of the 31% who have heard of the product only 15% felt they fully understand what it is, and how it works. A further 39% indicated that they broadly understand it but are not sure of the details while 12% were unclear or confused about some aspects and 3% were “totally confused”.
Neil Lovatt, Scottish Friendly’s Commercial Director said:
It’s not surprising that many people haven’t heard of a financial product that’s still to be introduced. However, awareness hasn’t been helped by the antipathy to the Lifetime ISA by the financial services industry which seems to be deliberately ignoring the introduction of this innovative new product.
The implementation of the Lisa has been a botched affair by the government. Even so, this is set to be the go-to investment for life’s journey in the years to come. We expect the Lifetime ISA to become an incentivised home for saving and investing that will eventually open up for all age groups, not just the under 40s, and one that will also be open to employer contributions.
The Lifetime ISA has the potential to become a truly customer-friendly lifetime investment that people will understand and have faith in. The current barrier between ISAs and pensions has to disappear and the sooner the better. Rather than sulking from the side line, it’s time for others in the industry to join us and lobby for improvements as we believe the Lifetime ISA is here to stay.
Scottish Friendly will be introducing its own Lifetime ISA that will offer investment funds later in the 2017-18 tax year.
The research was conducted by Why Research amongst a representative sample, in terms of age, region and broad socio-economic/employment grouping, of 1,000 UK adults, accessed through an online panel, between 15th and 20th February 2017.