Wealth at Work says the LISA could be re-purposed to provide a way to help individuals buy their first home as part of a workplace benefits package and keep paying into their pension.
The Treasury Committee has urged the government to ditch the LISA because of 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.”
Since the committee’s views were made public the views in the Financial Planning profession have been mixed with some backing the call to end the LISA and others against.
Jonathan Watts-Lay, director, Wealth at work, said the LISA could be saved but needs reform.
He said: “Instead of ditching the LISA completely, thought should be given to making it the key vehicle to help individuals buy their first home.”
“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.”
Mr Watts-Lay said his firm’s analysis suggested that, particularly for younger couples, a LISA could help a couple saving for their first home build up a decent pot of money for the purchase and also save through auto-enrolment at the same time, maximising the use of tax incentives from the LISA and pensions via workplace saving.
If individuals also find themselves paying less on their mortgage than when renting property, this could then free up even more money up to go into the pension, resulting in even more in their pension pot, says Wealth at Work.