Savers will have only a limited choice of Lifetime ISAs next year because some of the biggest providers have admitted they will not be able to offer the flagship savings accounts on the launch date of April 2017. Aegon, Fidelity, Nationwide and Standard Life are some of the firms that will not be open for LISA business next April. Aviva has also confirmed that its LISA is unlikely to be available in April.

Companies blame the delays largely on the Government’s failure to finalise important details about the accounts in time for the April launch.

Steven Cameron, pensions director at Aegon, said the investment company “cannot commit to any firm launch date” without knowing exactly how the products will work.

The number of accounts that will be available is therefore unclear. Patrick Connolly, certified financial planner at financial advisory firm Chase de Vere, said: “A delay in the Government providing details means we have no idea how many products will be available come the proposed launch date in April 2017.”

Some savers might be tempted to postpone opening an account if the choice of providers is small. But Danny Cox, a chartered financial planner at Hargreaves Lansdown, said savers should act promptly.

“If you decide that a LISA is suitable, you should start saving as soon as possible in order to make the most of the interest on the account or any stock-market returns,” he said.

“Savers can also transfer to another provider if a better account becomes available at a later stage.”

What is known about LISAs is that anyone between the ages of 18 and 40 will be eligible to open one and will be able to save up to £4,000 a year, with the Government adding a 25 per cent bonus at the end of each tax year until the age of 50.

In other words, someone opening a LISA on their 18th birthday and paying in the maximum £4,000 a year can expect a total bonus of £32,000.

The bonus is paid annually in the first tax year, but monthly from April 2018 and is calculated according to contribution levels. That means that if a balance of £4,000 earns interest of £100 the bonus will be 25 per cent of £4,000 and not of £4,100.

However, once the bonus is paid it will be added to the savings and earn interest.

While the bonus is one of the biggest attractions of the accounts, there are strings attached – the money saved has to be used either to fund the purchase of a first home worth less than £450,000 or be kept locked away until the age of 60.

If the cash is being used to buy a property it can be withdrawn at any time so long as it has been held for at least 12 months.

“The LISA cannot be used for a house purchase for the first 12 months so the first time eligible, penalty-free savings will available will be 6 April 2018,” said Mr Cox.

“However, the bonus for 2017/18 is unlikely to be paid for a few months after April 2018, so those wanting to use their LISA value plus bonus for property purchase in April, May or possibly June 2018 may well be disappointed.”

If the money is withdrawn for anything other than a home purchase before the age of 60 there will be a penalty of 25 per cent of the amount withdrawn.

“On the surface, you might think the penalty simply wipes out the 25 per cent bonus, but it’s more swingeing than that,” Mr Cameron warned.

“The 25 per cent penalty is based on the amount after the bonus and interest or investment growth, which means if you paid in £4,000 and decided to access all your cash after the first year’s bonus, you would pay a penalty of 25 per cent of £5,000 and get back only £3,750.

“Effectively, you would pay an additional penalty of £250 for accessing your money early – and that’s excluding any interest or investment growth.”

As with ISAs, there will be cash or a stocks and shares LISAs and savings interest or investment growth will be tax free.

Savers can open a standard ISA alongside a LISA as long as the total ISA allowance, which in the 2017/18 tax year will be £20,000, is not exceeded.

It will also be possible to transfer cash from other ISAs into the LISA as long as the £4,000 limit is heeded. However, in the 2017/18 tax year any amount of savings from a help to buy ISA can be transferred to a LISA.

Experts have broadly welcomed the LISA, but are warning of potential pitfalls.

Mr Cox said: “Savers will soon be able to choose from a range of different ISAs including innovative finance ISAs, help to buy ISAs and lifetime ISAs. They could therefore become paralysed by choice and there is certainly scope for simplification.”

There is concern, too, that the LISA might not last a lifetime.

Connolly said: “Government initiatives are always vulnerable to changes in political objectives and ambitions so there are no guarantees. The help to buy ISA only came onto the market in 2015 and already the scheme is being phased out.”

The pensions industry is also warning that the LISA could tempt people away from workplace pensions, which could be a mistake.

Mr Cameron said: “It’s worth remembering that under the automatic enrolment policy, all employees earning above £10,000 a year are enrolled into a workplace pension.

“Employers are required to contribute a minimum amount to the scheme on behalf of their employees, but employer contributions can be much more generous than the minimum, often matching the amount paid in by the employee.”

Mr Connolly added: “For some people, particularly the self-employed who are also basic-rate taxpayers, a LISA will be a better choice than a pension.

“However, there is a danger that too many people will invest in LISAs in preference to saving into their company pension scheme, missing out on generous employer contributions and potentially higher rate tax relief.”