69% of people are unaware of the Lifetime ISA and how it works, 2 months before its official launch, according to Aegon.
Research finds that 36% of people are still unaware of the new ISA account while a further 31% of those aged 16-34 don’t understand how it works.
46% however are expected to open an account with 32% using it to save for a house deposit and a further 26% using it to save for retirement.
From 6 April 2017, the Lifetime ISA will be available to individuals aged between 18 and 40. People can make annual contributions of £4,000 per year while receiving a 25% government bonus.
Funds can be withdrawn anytime towards retirement or buying a first home.
Steven Cameron, pensions director at Aegon, said:
“Young people face real challenges in saving for a first home while also thinking further ahead to retirement and any initiatives which get them saving more, or sooner, are a good thing.
“The Lifetime ISA will be attractive for prospective first time buyers but for employees saving for retirement, workplace pensions almost always offer greater incentives than the Lifetime ISA 25% bonus.”