The Lifetime ISA (LISA) has not caused an exodus from workplace pensions as feared, research by AJ Bell finds.
Some 78% of the product's users say they have continued to contribute into their workplace pension, and more than half (56%) are saving into a LISA to top-up their retirement income.
Just 3% of those who had opted out of their workplace pension said they had done so in order to put money into a LISA.
AJ Bell's findings, which come from a survey of 400 of its Youinvest LISA customers, will mitigate concerns that the more liquid product would draw young people away from pensions.
The savings vehicle was introduced by the government last year and allows savers to put aside up to £4,000 a year and gain a 25% government bonus in order to pay for retirement, a house deposit, or costs in ill-health.
The bonus is forfeited if the pot is accessed for any other reason - although 20% of LISA users were unable to explain how that charge worked.
Some 166,000 accounts were opened within the first year of the product's offering.
AJ Bell senior analyst Tom Selby said LISA was proving a "valuable savings option alongside the flagship" auto-enrolment (AE) programme.
"Encouragingly, fears savers would opt out of AE in their droves in order to fund their LISA appear to have been misplaced," he added. "Around four in five LISA savers are contributing to a workplace pension and a LISA, while just a handful have chosen to quit their workplace scheme."
He said the decision to save on top of AE "makes a mockery of calls made in some quarters to scrap the product altogether" although admitted "LISA is not perfect" and does create some confusion.
In July, the Treasury Select Committee called for the abolition of the product over "its complexity, its perverse incentives, its lack of complementarity with the pensions savings landscape, and its apparent lack of popularity with the industry and pension savers".
Former pensions minister Baroness Ros Altmann described it as a "Trojan horse".
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