A new cash lifetime ISA has been extremely popular with consumers, it has been revealed.
Skipton Building Society opened the only (so far) cash version of a Lifetime ISA in June. Since then 28,000 people have chosen to open one of the accounts.
The account, which was designed to allow consumers to both save for a first home and to save for retirement simultaneously, was launched on 8th June.
It’s believed that younger savers have been responsible for a lot of the new accounts, with 51 per cent of new customers recorded as being under the age of 30.
6 per cent of customers were aged 39, which is currently the cut-off age for opening what has been dubbed a ‘LISA’ account.
Kris Brewster, head of products for Skipton Building Society, noted his enthusiasm for the amount of younger consumers using the account as a first step towards owning their own home.
He said that the building society were ‘pleased’ to be able to offer a product that could help them take the first steps on the way to getting on the property ladder.
A high level of interest in the account has been maintained since June, according to Mr Brewster.
Currently, the building society’s LISA account pays 0.5 per cent interest per year, and according to Skipton figures, a 25-year-old that paid the maximum allowance of £4,000 for eight years would have a total pot of approximately £40,776 by the time they reached 33 years old.
The LISA account is currently unique on the market in that as well as allowing you to save tax-free towards either retirement or a property purchase, holders of the account are also eligible for a government bonus that is the equivalent of 25 per cent of what they save.
Should the holder save the maximum of £4,000 per year, for instance, they will be eligible to get a government bonus of £1,000 for the same period of time.
Although there are stocks and shares versions available from other providers, Skipton is the only high street presence to offer a cash LISA account. It will be interesting to see if young savers continue to maintain interest in the (currently) one-of-a-kind account.