For most people, a workplace pension where an employer offers a matching contribution is likely to be better. There are some ‘soft’ benefits of a Lifetime ISA (LISA), for example the availability of early access with penalties, but looking at the tax position, the options speak for themselves.

LISA Pension (BRT)  Pension(HRT)  Pension + Matching (BRT)  Pension + Matching (HRT) 
Tax relief10001000200010002000
Employer matching50006000
Tax free allowance (at 55)1250150025003000
Tax free allowance (at 60)5000
Taxable assuming BRT in retirement3000360060007200

Key: BRT/HRT – basic or higher rate taxpayer; all figures / £

The nature of this analysis is simplified, so I have ignored growth and assumed that even a higher rate taxpayer will be a basic rate taxpayer in retirement; we find this is commonly the case but care should be taken not to take the general summary above to apply to your own situation.

Opinions & Insights

Follow us

Stay in touch with our latest news and views

Register for updates

We issue regular updates which cover current financial planning topics. Please enter your email address if you would like to receive these. Please note that you may withdraw your consent to receive our updates at any time by notifying us at main business address.
 Thank you, you have been added to the mailing list, and will receive our next quarterly update.
 Please fill out the missing fields