The only lender to offer the Lifetime Isa to date says more than 42,000 under 40-year-olds have signed up to the deal.
The Government launched the initiative to help first-time buyers and boost personal pension pots in June and Skipton Building Society became the first lender to introduce the cash Lisa product in June.
The lender remains the only provider in the country to offer the product.
Skipton says 86 per cent of the clients that took out the product – which offers 0.5 per cent interest – to save towards buying their first house and are taking advantage of the government’s 25 per cent bonus.
“This sends a real signal of intent from our younger members that despite increasing house prices and squeezes on our wallets they are making a determined effort to get the keys to their first home,” says Skipton Building Society head of products Kris Brewster. “And we are pleased to offer a product that is helping to encourage future homeowners to save towards this significant milestone.”
He adds that since launching the product, there continues to be a high level of interest in it. “At Skipton, we believe the Lisa could make a real difference to a new generation of savers, not only in helping them get a foot on the property ladder, but providing them with another option to help them save for their future too – and all tax free,” he says.
However, mortgage brokers report that there has not been much interest in the product among their customers.
London Money founder and director Martin Stewart says: “Personally, I have seen very little interest in this product and I do not know any brokers who have. It’s probably Skipton’s pre-existing clients that have been taking it out.”
John Charcol senior technical manager Ray Boulger says: “Full marks to Skipton for introducing this product. I think its success will encourage other lenders to consider offering it. My understanding is that generally the lending industry feels the Lisa involves quite a lot of extra admin and would like to see more flexibility around how it works.”
He says that it is possible that Chancellor Philip Hammond will modify the product’s specifications in the Budget on November 22 to encourage other lenders to offer the product.
Some financial advisers say that there has been reasonable take up of the stocks and shares version of the Lisa. “We have seen quite a few clients take out our stocks and shares Lisa,” says Danny Cox, a chartered financial planner at Hargreaves Lansdown. “If more providers enter the market, the public’s general awareness about it would improve.”
Skipton also asked a 500-strong panel of its new Lisa customers about their saving plans. Some 34 per cent of 18 to 24 year olds expect to save into their Lisa for one to two years before buying their first home and 41 per cent expect to buy in three to five years’ time.