Transact has launched a Lifetime Isa product on the day the flagship Government initiative officially goes live.
The Lifetime Isa was launched with much fanfare by Osborne in the 2016 Budget. However, many providers have signalled they will not launch the product today.
UK residents aged between 18 and 40 will be able to open a Lifetime Isa and pay in up to £4,000 each tax year, with contributions qualifying for a 25 per cent Government bonus.
Savers are eligible to withdraw funds from the account to buy a first home worth up to £450,000, or it can be accessed from age 60 or in the event of terminal illness. Other withdrawals incur a 25 per cent exit charge, including on growth, except in the first year of the product, 2017/18.
Transact chief development officer Jonathan Gunby says: “We are pleased to offer the option to invest in a Lifetime Isa with Transact as early as possible. We believe it is important to provide a wide range of investment and wrapper options for advisers, and their clients, to ensure full investment flexibility in order that financial plans can be implemented in an efficient way.”
The Association of British Insurers warned savers should not forego their workplace pension to invest in a Lifetime Isa.
Long-term savings and protection policy head Yvonne Braun says: “It is key that the Lifetime Isa does not undermine the success of auto-enrolment in workplace pensions and the ABI urges Government to monitor whether the Lifetime Isa is having an impact on the auto-enrolment programme.”