The American 401k would be a good model to follow – it’s a workplace pension scheme into which employees contribute from their gross pay. Employers can contribute too, and pension pots grow free of tax.
But the beauty of the 401k is most of them allow savers to borrow from their pot – often up to 50 per cent of the balance. Such loans have to be repaid within five years, making them ideal for large one-off expenses like a deposit on a house.
Whatever you think of George Osborne, he (and Steve Webb) led a revolution in pensions. Pensions freedom successfully fired up people who are already saving into a pot, particularly those approaching 55. And auto-enrolment has forced millions of employees to take their first step in pension saving.
The Lisa was George’s last hurrah. Its obituary will record that the idea was strong on headlines but weak on detail. But what the Lisa did show was that there is a genuine appetite among younger people for a lifetime, or should that be lifestyle, savings vehicle.
So the pensions industry must respond to that latent demand by designing a product that offers the benefits of a conventional pension but reflects what younger people have so clearly shown they want.
The Lisa wasn’t the answer. But by asking such tough questions, it has challenged the pensions industry to find new ways to encourage a generation who are irredeemably turned off by pensions to get into the saving habit anyway.
So RIP Lisa. But if we in the pensions industry can harness the momentum Lisa created to build new saver-centred products that complete the pensions revolution, that will be a worthy legacy.
John Fox is director of Liberty SIPP
