LISA

[Mezger]

I have a family member most likely on 35-40k per annum, contributes to their workplace pension.

They have asked me if the Life Time ISA is worth it given the government contribution?

[chrishumes1978]

Why not just put more into the pension?

[cloud_dog]

Mezger said:

I have a family member most likely on 35-40k per annum, contributes to their workplace pension.

They have asked me if the Life Time ISA is worth it given the government contribution?

How old are they and would any contribution be for the long term, i.e. retirement?

Assuming they are younger than 40 and they are happy to access it at age 60, then for a basic rate tax payer then a LISA is the most cost effective /tax efficient way of saving for retirement.

There are a couple of caveats to this:

1) If they are or become a higher rate tax payer

2) Their existing employer offers payroll via Salary Sacrifice

For the above two scenarios then additional pension contributions are the best option.

[Mezger]

cloud_dog said:

ow old are they and would any contribution be for the long term, i.e. retirement?

Assuming they are younger than 40 and they are happy to access it at age 60, then for a basic rate tax payer then a LISA is the most cost effective /tax efficient way of saving for retirement.

There are a couple of caveats to this:

1) If they are or become a higher rate tax payer

2) Their existing employer offers payroll via Salary Sacrifice

For the above two scenarios then additional pension contributions are the best option.

Thanks, that's what my research (2mins on Google) confirmed, basic rate tax payer at present, unlikely to change in short/medium term.

They went ahead and opened the LISA with AJ Bell seemed to be the most cost effective one.