Parents to use Lifetime ISA to support children

Many parents are preparing to utilise the Lifetime ISA as a tool to encourage and assist their children to save, according to The Shared Centre.

Of the 832 parents over 40 surveyed, 64% said they would provide their children or grandchildren money to pay into the Lifetime ISA.

64% said they will be encouraging their children or grandchildren to open a Lifetime ISA, with a further 30% considering the option.

41% would give lump sums while 20% would provide payments on a regular basis.

The ISA account will be available to adults aged between 18 and 40 from 6 April 2017. Individuals can make contributions of up to £4,000 per year, and will also receive a 25% government bonus.

Funds can be withdrawn before reaching the age of 60 to use towards savings or purchasing a first home.

Further findings:

  • 72% say the ISA account will help young people save for the future
  • 65% would recommend the Lifetime ISA to help individuals save towards a home and for retirement
  • 48% can see family members using the Lifetime ISA after taking out funds to buy a home.

Darren Cornish, director of customer experience at The Share Centre, said:

“The flexibility of a product that helps younger people to save both for a home and retirement is another popular feature among parents and grandparents.”

Talk to us today about retirement planning.