People in their 30s and 40s are investing more into ISAs to help fund their retirement plans, according to new research by Fidelity Worldwide Investment (FWI).
The survey of 1,000 adults aged 30-48 shows that more than two fifths of people aged 30 to 40 with ISAs are using their savings towards funding their retirement.
Research also found:
- 15% rather use ISAs than save into a pension plan
- 28% use their ISA investments alongside workplace and pension savings
- 53% use ISAs because its tax-free
- 42% use ISAs for flexibility and access to their funds prior to retirement.
Maike Currie, associate investment director at FWI, said:
“ISAs rank highly among those in their 30s and 40s, who value the advantages of an ISA to help them make the most out of their long term savings. However, while it is encouraging that this generation want to put aside money for their retirement in a tax efficient way, those who dismiss pensions for this purpose, are missing out on advantages that the ISA doesn’t have.
““While they might not be able to dip in and out of a retirement ISA like a traditional ISA, it does allow for them to actually save something for their retirement in a tax-efficient savings vehicle they understand.
“The fact that the money is locked away until retirement age will enforce a savings discipline and ensure the younger generation have put something away for their old age.”