Company pension scheme is valued by renters and home-owners alike
Despite the lure of the LISA, people already in company pension schemes would overwhelmingly stay in their current arrangement or use both products for their retirement saving, according to research by Fidelity International.
Surveying those aged 18-40 on their attitudes to the LISA and retirement saving, only 7% in a company pension said they would abandon their company pension entirely on the introduction of the LISA with 56% preferring to stick solely with their workplace offering and the remaining 37% leaning towards using both.
However, whilst there are fears that the LISA would influence young renters to opt out of retirement saving in greater numbers, analysis by Fidelity suggests that the LISA may be irrelevant in that regard.
Additionally, the report also revealed that only 20% of renters are in a company pension compared to 30% of homeowners, suggesting that people intent on saving for their own home tend to opt out of auto-enrolment independently of any influence from the LISA.
Richard Parkin, Head of Pensions at Fidelity International, commented: “We’ve always said that suggestions that the LISA will undermine pension savings are, we think, overdone. Encouragingly, the research shows that those who are involved in company pensions do value them and will stick with their scheme even when LISAs are launched.
“The idea that people will opt out of pensions to save for house purchase in a LISA seem to confuse cause and effect. Those who are determined to buy their own home but can’t afford to do that and contribute to their workplace pension will surely opt out of the pension in any case – as our results show.”
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