Chris Noon, partner, Hymans Roberson comments on the efficiency of the Lifetime Isa (LISA) as a savings vehicle. His comments follow remarks made by former Pensions Minister Ros Altman that the LISA is “a product (that) has mis-selling written all over it.”

We need to look at the reality for many young people. A 25 percent bonus on savings towards a first home will be an irresistible and much appreciated leg up on to the property ladder for many. There is a growing disparity in wealth between the generations. And anything that gets younger people into the savings habit should be viewed as a positive. We also need to move away from looking at pensions and LISAs as competing products.

One should not be at the expense of the other. For LISAs to be an effective long-term savings vehicle, however, they must follow a different path to mainstream ISAs. The underlying investments need to be effective – most ISA money is in cash – and pricing should be appropriate and consistent with workplace pension solutions. If employers offered these through the workplace, they could provide the governance required to ensure they were fit for purpose.

 There is a savings car crash looming on the horizon. Post Brexit, the number of UK workers that won’t be able to retire with an adequate income has increased from two thirds to three quarters. The biggest issue we face is that as a nation is that we’re under-saved. Gross UK saving has halved in the past 40 years, household debt has tripled and consumption keeps rising. We need to restore a savings culture. Any incentives, be they tax relief, government bonuses or employer matching contributions, have to be viewed as a good thing. +While they may help, they won’t solve the problem. That requires a shift to cohesive, long-term pensions policy-making – something that has been lacking for many years. While we’ve had positive steps forward with auto-enrolment increasing participation in pension savings, at the other end we have freedom and choice which leaves the door open for retirement savings to be taken as cash and spent. We can’t keep kicking the can up the road by opening up more and more routes to drive down saving levels and increase spending levels further.”