Automatic enrolment provider Now: Pensions will “almost definitely” offer a Lifetime Isa to employers in addition to workplace pensions.
Specialist auto-enrolment firms have been cagey since Chancellor George Osborne announced the new product in his Budget, warning it could undermine workplace pensions.
But Now: Pensions director of policy Adrian Boulding, speaking as part of Money Marketing’s Wired series, says the provider will “almost definitely” help employers contribute to Lifetime Isa accounts.
Boulding thinks some firms will demand flexibility in workplace benefits packages and will not want separate pension and Lifetime Isa providers.
Royal London has been particularly critical of the potential impact on auto-enrolment but would not rule out offering the Lifetime Isa.
Standard Life and Hargreaves Lansdown are among the big names to have committed to the market.
Providers are already under pressure from a combination of the 0.75 per cent charge cap and typically very low member contributions.
Government-backed scheme Nest is unable to say when it will pay back its £387m loan from the Department for Work and Pensions.
Now: Pensions research with around 700 under-40s found nearly a third plan to save in both products when the Lifetime Isa launches in April 2017. One in 10 say they will opt out of a workplace pension and put their savings into the Isa.