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