Nearly 70% of OneFamily Lifetime ISA customers are saving for the long-term and planning on using it to fund their retirement.
- Nearly 70% of OneFamily Lifetime ISA customers are using the product for retirement savings
- Over half (53%) of Lifetime ISA customers specifically took it out for retirement and 14% are using it for both retirement and buying a first home
- Lifetime ISAs proving most popular amongst older target market with half of all savers (49%) aged 36 – 39 years old
- 18 – 40-year olds estimate they will need £34,000 a year in retirement income[i] so starting to save early is key to reaching this goal
Nearly 70% of OneFamily Lifetime ISA customers are saving for the long-term and planning on using it to fund their retirement. Over half (53%) of the Lifetime ISAs opened are specifically being used towards retirement and an additional one in seven (14%) are opened for both retirement and to save for a first home. As savers take advantage of the generous government bonus and potential investment returns. The ISA is proving particularly popular with savers aged 36 – 39, at the top of the age bracket for eligibility, with 50% of all savers being in this age group.
Additional ways to save towards retirement are likely to increase in popularity with 40% of under 40s saying they don’t believe a pension alone will be enough. The average monthly payment into a Lifetime ISA being used for retirement is £75. If a saver takes a Lifetime ISA at age 30 and continues to invest every month by the time they reach 60, with the government bonus and 5% annual interest, they will have nearly £50,000 saved, having originally invested £18,000.
OneFamily research also revealed that people aged 18 – 40 hope to retire at age 64, three years prior to the current retirement age, meaning they would be without a state pension when they first stop working. Savings from a Lifetime ISA can be withdrawn at age 60 and can therefore help bridge the gap.
Nici Audhlam-Gardiner, Managing Director of Lifetime ISAs at OneFamily commented:
“It is positive to see so many younger people are already thinking what they will need to fund their retirement. It’s important to start saving little and often as early as possible. The increase in people thinking about, and saving towards their retirement can in part can be put down to the government’s auto-enrolment scheme that sees all employees automatically being put into a company pension.
“But this is only applicable to certain workers and excludes the self-employed and those in the gig economy. The number of private pensions is still very limited with just 11% of under 40s having one.
“Savvy savers thinking about retirement should consider the Lifetime ISA as another way to save and access the unique 25% government bonus, and potential investment returns. The bonus is paid monthly so savers should make the most of the new tax year to maximise returns.”
To find out more about OneFamily’s Lifetime ISA visit: onefamily.com/lifetime-isa/
[i] OneFamily research