ISAs overtake pensions in popularity Go compare with our comparison table

ISAs overtake pensions in popularity

12 April 2012 / by Colm Hebblethwaite

The Office for National Statistics (ONS) has released figures that show that people in the UK have put more money into stocks and shares ISAs than personal pensions. 2010/11 saw around £15.84 billion being placed into investment ISAs, while pension contributions amounted to around £14.28 billion. This is the first time pension contributions have lagged behind since 2001. In 2010/11 roughly £38 billion was placed into cash ISAs.

ISAs much simpler

The ONS figures suggest that people are increasingly losing faith in pension schemes, and are turning to products such as ISAs, that are viewed as being much simpler and less open to political interference, hidden raids and vested interests.

Figures released by the Association of British Insurers (ABI) confirm that personal pension contributions have been falling since 2007. Many people see this as a result of a number of changes in legislation regarding UK pension schemes, including limits to annual pension contributions and plans for the introduction of a flat rate.

People increasingly disillusioned with pensions

Director at Fair Investment Company James Caldwell, said "People are becoming increasingly disillusioned with pensions. These figures are not exactly surprising when you consider that over the years successive governments have meddled with pension legislation, resulting in increased complexity, combined with a legacy of high charges and poor performance. To cap it all, for those shortly about to retire there is the prospect of all time low annuity rates when using their pension fund to generate income."

Mr Caldwell went on to say that in contrast "the success of ISAs as a savings vehicle is down to their simplicity and flexibility".

© Fair Investment Company Ltd

Growth Investment ISAs
ProviderPlan NameCounterpartyISA OptionTermMaximum Potential ReturnMore Info
FTSE 100 Enhanced Kick Out PlanInvestec Bank plcyesUp to
6 years

9.5%

per annum

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Structured investment plan with the potential to mature after years 1, 2, 3, 4, 5 or 6. If the plan matures early it will return 9.5% times the number of years the plan has been in force. Also available for Stocks & Shares ISA and ISA transfer.
FTSE 100 Defensive Growth PlanInvestec Bank plcyes6 years

33.0%

after 6 years

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6 year structured investment plan which aims to return 33% if the FTSE 100 is higher than 50% of Initial Level. Available for Investment ISA, and ISA transfer.
FTSE 100 Step Down Kick-Out PlanInvestec Bank plcyesUp to
6 years

8.0%

per annum

More Info >
Structured investment plan with the potential to mature after years 2, 3, 4, 5 or 6. If the plan matures early it will return 8% times the number of years the plan has been in force. Also available for Stocks & Shares ISA and ISA transfer.
Important Information: Structured investment plans are not capital protected and are not covered by the Financial Services Compensation Scheme (FSCS) for default alone. Income and growth returns are not guaranteed. There is a risk of losing some or all of your initial investment due to the performance of the underlying Index or commodity. There is also a risk that the company backing the plan known as the Counterparty may be unable to repay your initial investment and any returns stated.