58% of millennials currently saving for a house deposit are more confident in their ability to achieve their goal following the Chancellor’s stamp duty changes, according to the latest sentiment research from the Foresters Friendly Society.
17% of this age group are much more confident following the announcement.
The Lifetime ISA (LISA) was developed in order to specifically help those under 40 years old in their long-term saving. And while there is now a strong awareness of the Lifetime ISA amongst this age group, with 75% having heard of it, too few have chosen to take advantage of the benefits.
Take-up sits at just 11% of those eligible and this figure remains the same even amongst the 33% of respondents who view a house deposit as one of their current savings priorities.
The Foresters Friendly Society says the figures clearly show the lack of understanding amongst younger savers about the best way to save at their stage of life, with many preferring options that offer limited risk but also weaker returns. Low down on the list of preferable saving vehicles are those options that are best suited to early saving such as the Lifetime ISA (9%) and Stocks and shares (5%). Those that are saving for a house deposit are instead opting for savings accounts (43%), cash ISAs (27%), and current accounts (24%) as their preferred way to save.
Paul Osborn, chief executive of the Foresters Friendly Society, said: “As young people continue to strive to get on the housing ladder, it’s hugely important that they use the most suitable products to help them achieve their savings goals. While economic uncertainty tends to push people towards options deemed as lower risk, doing so can mean forfeiting much needed returns and makes the effort of saving for a house deposit feel even more of a struggle.
“While it’s encouraging that three quarters of those under 40 are aware of the Lifetime ISA, it is evident that more work needs to be done to help them understand the role that it can play in their long-term savings plan. The 25% government bonus offers significant savings support at a time when inflation continues to outstrip wage growth and is putting pressure on people’s savings.”