LISA and workplace pension scheme

GuruAsh

Hi,

I've done a fair bit of reading (and perhaps over-read) around LISA's in the past few days and decided I'd apply for Skipton's cash LISA.

There's a particular sentence on one of their application pages that I'm getting a little confused with:

"If you’re employed and save into a Lifetime ISA instead of enrolling in, or contributing to, a workplace pension scheme provided by your employer, or another personal pension scheme, the following could happen:

• You will lose the contributions your employer would otherwise pay into that scheme
• Your current or future entitlement to means tested benefits could be affected

"

Now I have two interpretations of this sentence and two bullet points:

i) You can have both a LISA and a workplace pension and that the quoted sentence is simply saying that a LISA won't get employer contributions and that having a LISA isn't really a substitute for contribution workplace pension schemes, due to the extra cash you get from your employer. But opening and paying into a LISA doesn't affect existing workplace pension schemes in any way(?). My thought was that a LISA is just a special form of Cash ISA and is therefore completely separate from private workplace pensions...

or;

ii) If you take out a LISA, your existing workplace pension scheme will basically close somehow / lose employer contributions to it?!

I'm hoping that the first scenario is the case and not the second?! If someone could please clarify that'd be great!

This is probably obvious, but the more I read it the more cautious and paranoid I get! :rotfl:

Thanks in advance!

badger09

GuruAsh wrote: »

Hi,

I've done a fair bit of reading (and perhaps over-read) around LISA's in the past few days and decided I'd apply for Skipton's cash LISA.

There's a particular sentence on one of their application pages that I'm getting a little confused with:

"If you’re employed and save into a Lifetime ISA instead of enrolling in, or contributing to, a workplace pension scheme provided by your employer, or another personal pension scheme, the following could happen:

• You will lose the contributions your employer would otherwise pay into that scheme
• Your current or future entitlement to means tested benefits could be affected

"

Now I have two interpretations of this sentence and two bullet points:

i) You can have both a LISA and a workplace pension and that the quoted sentence is simply saying that a LISA won't get employer contributions and that having a LISA isn't really a substitute for contribution workplace pension schemes, due to the extra cash you get from your employer. But opening and paying into a LISA doesn't affect existing workplace pension schemes in any way(?). My thought was that a LISA is just a special form of Cash ISA and is therefore completely separate from private workplace pensions...

or;

ii) If you take out a LISA, your existing workplace pension scheme will basically close somehow / lose employer contributions to it?!

I'm hoping that the first scenario is the case and not the second?! If someone could please clarify that'd be great!

This is probably obvious, but the more I read it the more cautious and paranoid I get! :rotfl:

Thanks in advance!

i) is the correct interpretation

PS You're not paranoid. They are out to get you :rotfl:

GuruAsh

Haha!

Thanks for the quick response!