The LISA is a tax free investment account. There are no capital gains taxes on it. This is similar to the regular ISA (which you can put up to £20k in per year, doesn’t have a 25% bonus, and can be used for anything—the £4k LISA cap contributes to this £20k). I omitted this as I was implicitly viewing using this account as the counterfactual.
The LISA is often strictly worse than a workplace pension for saving for retirement, if you are employed. This is because you invest in a LISA post-(income)tax, while pension contributions are calculated pre-tax. Even if the bonus approximately makes up for tax you pay, employer contributions tip the balance towards the pension.
Couple more things I didn’t explain:
The LISA is a tax free investment account. There are no capital gains taxes on it. This is similar to the regular ISA (which you can put up to £20k in per year, doesn’t have a 25% bonus, and can be used for anything—the £4k LISA cap contributes to this £20k). I omitted this as I was implicitly viewing using this account as the counterfactual.
The LISA is often strictly worse than a workplace pension for saving for retirement, if you are employed. This is because you invest in a LISA post-(income)tax, while pension contributions are calculated pre-tax. Even if the bonus approximately makes up for tax you pay, employer contributions tip the balance towards the pension.