Could a Lifetime ISA fund the majority of retirement?

An 18-year-old saving the full allowance towards their retirement could save £482,046 by age 60, based on an assumed 5% annual growth from an investment Lifetime ISA - 83% of the projected required retirement fund of £578,000.

This is nearly four times more than most people will see from state pension pay-outs, based on an average 17-year retirement (£145,285).

Additional Government bonuses will fund a full year's estimated retirement spend of £34,000.

Nearly 70% of OneFamily Lifetime ISA customers are using it for retirement savings and the average monthly payment is £75. If a saver takes a Lifetime ISA at age 30 and continues to invest every month by the time they reach 60, they will generate £51,921.

Nici Audhlam-Gardiner, managing director of Lifetime ISAs at OneFamily, commented: “Whatever your personal goals for retirement, it’s important to plan ahead to make sure you have adequate savings. Private and workplace pensions are a great way to save for retirement, however these alone might not meet the expectations of today’s young people, or may not be available for those who are self-employed. It’s important to consider other forms of retirement saving, such as a Lifetime ISA, to ensure you have enough set aside to reach your goals.

“Saving little and often from a young age can have a huge impact, particularly when anything you put aside will benefit from a Government bonus with a Lifetime ISA.”