“So if you use it properly a pension is still going to be better, but if you don’t use it properly, a regular Isa is going to be better because you will have to pay 5 per cent to take your money out of the Lisa.”
The panel also raised concerns that the Lisa could undermine and reverse the success of the auto-enrolment initiative as people may choose to opt-out and save in the new product.
Mr Daems said he does not envisage the Lisa being the most popular vehicle for retirement savings in the future. Instead, it is likely to be popular with individuals seeking to get onto the property ladder, he added.
Mr Yuille said: “If it [the Lisa] is primarily about housing, and an incentive for the self-employed, that is fine. If we see people opting out of workplace pensions in order to save into Lisas, or if we see people recycling their cash by putting it in a Lisa to take advantage of the government incentive, then it is a problem.
“It is hard to see much that can be achieved through this product that couldn’t already be achieved through the modest revisions of existing products.”
To sum, the panel acknowledged the lure for want-to-be homeowners of the 25 per cent government bonus for annual Lisa savings of up to £4,000, while expressing scepticism about its retirement savings credentials.
Were the 90-plus advisers who attended the event won over by the merits of the product? The answer: a resounding no.
When asked by panel chairwoman Emma Hughes, editor of FTAdviser, to indicate by a show of hands if they would recommend the Lisa to their existing clients, only a handful did so.
Mr Daems said: “It has just added more complexity to a market that actually needs simplicity, and I am not convinced that it will encourage people to save more than they do now.
The Lisa was a last-minute policy. So much so that the product concept was not conceived 14 days before the 2016 Budget, Ms Altmann revealed in her speech later in the day. It is widely recognised by industry commentators as a halfway house towards the introduction of a Pensions Isa regime
The product is due to be introduced in April next year, yet the industry remains in the dark about some details, such as provisions for borrowing against the Lisa and when the government bonus would be paid.
What is more, few providers have confirmed they will offer Lifetime Isas when the product goes live.
