A grand total of zero banks and building societies have opted to take up the Government’s new Lifetime ISA (LISA) cash account on the day of its launch, it has emerged.
The news indicates that banking groups have taken very little interest in the new savings and investment vehicle, amid reports that they are complicated to use and potentially pose future regulatory issues.
The LISA, aimed at pension savers and first-time buyers, received criticism earlier this year after it was revealed that withdrawing cash for anything other than its intended purposes would result in the account holder losing money.
The cash version allows holders to deposit up to £4,000 each year, to which the Government will add a 25 per cent top-up. However, the cash can only be withdrawn when the account holder turns 60, or when it is used to purchase a first home. Withdrawing early will incur a 25 per cent penalty.
Just three providers – Hargreaves Lansdown, The Share Centre, and Nutmeg – launched the stocks and shares version of the LISA in April. Hargreaves Lansdown said it opened 3,349 accounts in the first 24 hours of its launch.
In December last year, Nationwide announced that it would not offer LISAs because they were “too complicated”.
It added that it would continue with the help-to-buy ISA instead.
Experts have also warned that LISAs could pose future regulatory issues in the event that they are mis-sold to unsuitable clients.
Hannah Maundrell, editor-in-chief of Money.co.uk, said: “Yet again the government has promised consumers the chance of a shiny new savings vehicle without consulting with the industry on how and when they can deliver it.”