The Financial Conduct Authority (FCA) has recently voiced concerns that new Lifetime Individual Savings Accounts (LISAs), due to launch next year, could be putting some savers at risk if the product is not fully understood.
LISAs are being sold as a way to earn bonuses if the money put into them is put towards the purchase of a home or saved for retirement. However, the FCA believes that warnings should be clearly communicated to consumers to protect them from the risks which have been less well publicised.
Amongst the key issues the FCA feels needs to be made clear are the difference between saving with a LISA and saving into a pension product, and the early exit charges that savers may be subject to with a LISA. They also believe providers should offer the right to cancel for thirty days after the sale of a LISA.